This is an example of the Cascading principle of CSS.

So which rule will the paragraph tag take?

The body font defines the base font and it is inherited by the p tag font. In this case the font size is 100% and so the base font size is 100%. The p element always inherits from the elements parent which in this case is the body element.

So as the p element is 200% of the base font, it means the actual font size of the p elements is 200%.

We can try changing the body base font to 200% and see what happens. You will see that the p element size are all increased.