If pizza is a normal good, (a) the demand for it raises when the price of it raises

If pizza is a normal good,

(a) the demand for it raises when the price of it raises

(b) the demand for it raises when income raises

(c) the demand for it raises when the price of it falls

(d) the demand for it raises when income falls

Answer: (b) the demand for it raises when income raises

Any manufactured or service good that is priced relatively inverse to the consumer’s income is categorized as a normal good. This is so because, out of the total quantity of disposable income in excess of the specified amount than ½ of the same is spent on goods or services. In the case of pizza being considered a normal good, option b is correct: Therefore, by identifying that all the variables of the consumer income have risen, this will mean an increased pizza consumption. On the same note, if there was a decrease in income then this also results in a decrease in the quantity demanded of the pizza market. The argument that relates to option a is wrong because demand for a normal good is normally influenced by its price and therefore one would expect demand for the good to be lower than before given the increase in the price. Option c is also incorrect because an increase in demand will always be a wrong signal that we need to change the price, and this is wrong instead of an indication of income changes. Option d is misleading as where income reduces, then expenditure reduces, which shall imply reduced demand for the normal good, in this case, pizza.