Brad is willing to pay \$50 for a concert ticket, but the market price is \$35. Which of the following illustrates the most economically sound choice for Brad?

• A. Brad waits for the ticket price to increase before making a purchase.
• B. Brad offers to pay \$50 for the ticket even though the market price is \$35.
• C. Brad decides not to buy the ticket because the price is lower than his willingness to pay.
• D. Brad buys the ticket and enjoys a consumer surplus of \$15.

Answer: (D)

Verified step by step guidance

1. Understand the concept of willingness to pay (WTP), which is the maximum amount a consumer is ready to pay for a good or service. Here, Brad's WTP is \$50 for the concert ticket.
2. Identify the market price of the ticket, which is given as \$35. This is the actual price Brad must pay to purchase the ticket.
3. Calculate the consumer surplus, which is the difference between the willingness to pay and the market price. The formula is: \(\text{Consumer Surplus} = \text{WTP} - \text{Market Price}\).
4. Apply the values to the formula: \(\text{Consumer Surplus} = 50 - 35\) to find the amount of surplus Brad gains by buying the ticket at the market price.
5. Interpret the result: since the consumer surplus is positive, it is economically rational for Brad to buy the ticket and enjoy the surplus, rather than waiting or refusing to buy.