If a decrease in income leads to in a decrease in the demand for pizza, then pizza is:
A)a normal good.
B)a neutral good.
C)a complement.
D)a necessity.

Question

Quizplus · Accepted Answer

A normal good is one for which the demand increases as income increases and decreases as income decreases. Pizza is likely a normal good because a decrease in income leads to a decrease in demand, suggesting that it is a luxury item that people may cut back on when they have less money to spend.

If a Decrease in Income Leads to in a Decrease