When the price of pizza increases, consumers have an incentive to:
A) decrease their demand for pizza.
B) purchase substitute goods, such as Chinese food.
C) increase their consumption of pizza since it is now more valuable.
D) open another pizza restaurant in order to increase supply and drive prices down.

Question

Quizplus · Accepted Answer

When the price of pizza increases, consumers are likely to purchase substitute goods, such as Chinese food, because the higher price makes pizza less attractive compared to alternatives.

When the Price of Pizza Increases, Consumers Have an Incentive