00:01
It says what would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly fell.
00:08
Fewer firms decided to produce peanut butter and health officials announced that eating peanut butter was good for you.
00:14
So because the price of peanuts has gone up, the price of peanut butter will also go up.
00:19
There's less peanut butter supplied.
00:22
This means that the supply curve is going to shift left for peanut butter.
00:26
The announcement that peanut butter is good for the health is intended to shift the demand curve to the right.
00:31
However, this is ambiguous.
00:33
It may not work if our customer base is not health conscious.
00:40
So let's take a look at the supply and demand curves.
00:48
So we know that the supply curve has shipped from s1 to s2.
00:56
So initially we have s1 and d1.
01:04
So we have quantity 1, q1, and price 1 as the equilibrium price and quantity.
01:15
Then the supply shifts to the left...