The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut buffer is good for your heart. Holding all other factors constant, which of the following scenarios could happen?

a. The price of peanut butter increases to $7 because of a supply shift.
b. The price of peanut butter decreases to $4 because of a supply shift.
c. The price of peanut butter decreases to $4 because of a demand shift.
d. The price of peanut butter increases to $7 because of a demand shift.
e. The price of peanut butter increases to $7 because of a demand AND a supply shift.

Question

03-01-2020
Business

contestada

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut buffer is good for your heart. Holding all other factors constant, which of the following scenarios could happen?

a. The price of peanut butter increases to $7 because of a supply shift.
b. The price of peanut butter decreases to $4 because of a supply shift.
c. The price of peanut butter decreases to $4 because of a demand shift.
d. The price of peanut butter increases to $7 because of a demand shift.
e. The price of peanut butter increases to $7 because of a demand AND a supply shift.

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Answer:

The equilibrium price of peanut butter is $5. A study comes out that says the fat in peanut buffer is good for your heart. Holding all other factors constant, which of the following scenarios could happen?

The price of peanut butter increases to $7 because of a demand AND a supply shift

Explanation:

As a result of price increment, there would be a shift in the demand and supply. the increase in demand as a result of health importance would directly cause an increase in supply for the increase in demand to be met.