What Would Happen to the Equilibrium Price and Quantity of Peanut

question 115

Multiple Choice

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up,the price of jelly fell,fewer firms decided to produce peanut butter,and health officials announced that eating peanut butter was good for you?

• A)Price will fall,and the effect on quantity is ambiguous.
• B)Price will rise,and the effect on quantity is ambiguous.
• C)Quantity will fall,and the effect on price is ambiguous.
• D)Quantity will rise,and the effect on price is ambiguous.

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Definitions:

Disadvantage

refers to a unfavorable condition or position that reduces the chances of success or effectiveness.

Average Accounting Return

A financial ratio that compares the average annual net income of an investment to its initial cost to assess its profitability.

Accounting Basis

The method in which income and expenses are recognized in the accounts; common methods include cash basis and accrual basis accounting.

Computation

The process of performing mathematical calculations or processing data using algorithms, often carried out by computers.