Which of the following could cause an increase in the demand for peanut butter?

• A. A decrease in consumer income, assuming peanut butter is a normal good
• B. A rise in the price of jelly, a complement to peanut butter
• C. An increase in the population of people who like peanut butter
• D. A decrease in the price of peanut butter

Answer: (C)

Verified step by step guidance

1. Understand the concept of demand: Demand refers to the quantity of a good that consumers are willing and able to purchase at various prices, holding other factors constant.
2. Recall that for a normal good, a decrease in consumer income typically causes a decrease in demand, so a decrease in income would not increase demand for peanut butter if it is a normal good.
3. Recognize that jelly is a complement to peanut butter, so a rise in the price of jelly would generally decrease the demand for peanut butter, not increase it.
4. Consider the effect of population changes: An increase in the population of people who like peanut butter would increase the number of potential buyers, thus increasing the demand for peanut butter.
5. Note that a decrease in the price of peanut butter causes a movement along the demand curve (an increase in quantity demanded), but does not shift the demand curve itself, so it does not represent an increase in demand.