The price of peanut butter increases from $3

First of all, we need to compute the percentage change in price and quantity demanded. You can find below the equations to do it.

%Δ Price=P1−P0P0∗100%Δ Price=P1−P0P0∗100

%ΔQuantity Demanded=Q1−Q0Q0∗100%ΔQuantity Demanded=Q1−Q0Q0∗100

Note that P1 is the new price of the good and P0 is the original price. On the other hand, Q1 is the quantity after the price change and Q0 is the quantity before the change.

%Δ Price=$3.5− $3.00$3.00∗100=16.67%%Δ Price=$3.5− $3.00$3.00∗100=16.67% (rounded to two decimal places)

%Δ Quantity Demanded=24−3030∗100=−20%%Δ Quantity Demanded=24−3030∗100=−20%

Now, we can proceed to compute the cross-price elasticity of demand (XED) using the following formula.

XED=% change in Qty demanded of good X% change in Price of good YXED=% change in Qty demanded of good X% change in Price of good Y

XED=−20%16.67%=−1.20XED=−20%16.67%=−1.20

Therefore, the XED coefficient is -1.20 which means that these two goods are complements because the coefficient is negative.