A consumer might respond to a negative incentive by:

• A. increasing their willingness to pay for the good
• B. reducing their quantity demanded of the good
• C. purchasing more of the good at any price
• D. experiencing an increase in consumer surplus

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the concept of a negative incentive in microeconomics. A negative incentive is a factor that discourages a consumer from purchasing a good, such as a price increase or a tax.
2. Step 2: Recall the law of demand, which states that when the price of a good rises (a negative incentive), the quantity demanded typically decreases, assuming all else equal.
3. Step 3: Analyze each option in the context of a negative incentive: increasing willingness to pay contradicts the discouraging effect; purchasing more at any price is unlikely; experiencing an increase in consumer surplus is also unlikely because consumer surplus usually decreases when prices rise.
4. Step 4: Conclude that the most consistent consumer response to a negative incentive is to reduce the quantity demanded of the good.
5. Step 5: Summarize that the correct answer aligns with the fundamental demand theory: a negative incentive leads to a decrease in quantity demanded.