Suppose one observes that when the price of peanut butter increases, the demand for jelly increases. One must conclude that:
A)peanut butter and jelly are complements.
B)peanut butter and jelly are substitutes.
C)peanut butter and jelly are normal goods.
D)peanut butter and jelly are inferior goods.

Question

Quizplus · Accepted Answer

When the price of peanut butter increases and the demand for jelly increases, it suggests that consumers are substituting jelly for peanut butter, indicating that they are substitutes.

Suppose One Observes That When the Price of Peanut Butter