Question

In: Economics

When a buyer's willingness to pay for a good is equal to the price of the good, the


When a buyer's willingness to pay for a good is equal to the price of the good, the 

  • buyer's consumer surplus for that good is maximized. 

  • price of the good exceeds the value that the buyer places on the good. 

  • buyer is indifferent between buying the good and not buying it. 

  • buyer will buy as much of the good as the buyer's budget allows. 

Solutions

Expert Solution

Solution

Correct Answer is (c)

The term willingness to pay refers to the maximum amount an individual is willing to pay for a good. When the buyer's willingness to pay and price of good which he is trying to buy is equal then he will be indifferent between buying the good and not buying it

Rahul Sunny answered 2 years ago
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