Asked by Elizabeth McGee on Jul 07, 2024
Verified
A consumer's willingness to pay depends on the:
A) cost of producing a given good or service.
B) expected additional benefit of consuming a given good or service.
C) size of the shortage of a given good or service.
D) size of the surplus of a given good or service.
Willingness to Pay
The maximum amount an individual is prepared to spend for acquiring a good or service, reflecting their valuation of the item.
Consuming Benefit
Consuming benefit pertains to the utility or satisfaction a consumer derives from purchasing and using a product or service.
- Fathom the correlation between a consumer's payment inclination, market rate, and the excess consumer benefit.
Verified Answer
DW
Daniel WoodsJul 14, 2024
Final Answer :
B
Explanation :
A consumer's willingness to pay is based on the expected additional benefit they will receive from consuming a good or service. This can be influenced by factors such as personal preferences, income, and the availability of substitutes. The cost of producing the good or service, size of shortages or surpluses, while they may affect prices, do not directly impact a consumer's willingness to pay.
Learning Objectives
- Fathom the correlation between a consumer's payment inclination, market rate, and the excess consumer benefit.