If the price of a Domino's pizza decreases while the price of a Pizza Hut pizza is unchanged, we expect the demand for Pizza Hut pizza to:
A) increase as some consumers switch from Pizza Hut pizza to Domino's pizza.
B) decrease as some consumers switch from Pizza Hut pizza to Domino's pizza.
C) remain unchanged.
D) change depending on what happens to the supply of Pizza Hut pizza.

Question

Quizplus · Accepted Answer

If the price of a close substitute (in this case, Domino's pizza) decreases, it is likely that some consumers will switch to that substitute, leading to a decrease in demand for Pizza Hut pizza. Therefore, we expect the demand for Pizza Hut pizza to decrease as some consumers switch to Domino's pizza.

If the Price of a Domino's Pizza Decreases While the Price