The Observation That the Demand Curve for Grape Jam Shifts

question 59

Multiple Choice

The observation that the demand curve for grape jam shifts rightward every time the price of peanut butter falls, means that grape jam and peanut butter are

• A)normal goods.
• B)complements.
• C)inferior goods.
• D)substitutes.

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Definitions:

Reference Pricing

A type of psychological pricing in which a lower-priced item is compared to a more expensive brand in hopes that the consumer will use the higher price as a comparison price.