How does buying items in bulk usually help a consumer in terms of consumer surplus and willingness to pay?

• A. It reduces the total amount of goods the consumer can purchase.
• B. It allows the consumer to pay a lower price per unit, increasing their consumer surplus.
• C. It increases the market price for all consumers.
• D. It decreases the consumer's willingness to pay for each unit.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of consumer surplus, which is the difference between what a consumer is willing to pay for a good and what they actually pay.
2. Step 2: Recognize that buying items in bulk often leads to a lower price per unit compared to buying smaller quantities.
3. Step 3: Analyze how a lower price per unit affects consumer surplus: since the consumer pays less than their maximum willingness to pay for each unit, their consumer surplus increases.
4. Step 4: Consider the effect on willingness to pay: buying in bulk does not decrease the consumer's willingness to pay; rather, it leverages the existing willingness to pay by reducing the price paid.
5. Step 5: Conclude that buying in bulk helps consumers by increasing consumer surplus through lower prices per unit, allowing them to get more value from their purchases.