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 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 are likely to seek out substitute goods that offer similar satisfaction at a lower cost, such as Chinese food, to maximize their utility.

When the Price of Pizza Increases, Consumers Have an Incentive