When the price of pizza increases, consumers have an incentiveto:
A)decrease their demand for pizza.
B)purchase substitute goods such as Chinese food.(True Answer )Correct
C)increase their consumption of pizza as 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 may choose to purchase substitute goods, such as Chinese food, as an alternative to pizza. This is because the price increase makes pizza relatively more expensive compared to other goods, and consumers may be incentivized to purchase goods that are now relatively cheaper.

When the Price of Pizza Increases, Consumers Have an Incentiveto