Which concept best describes the benefit consumers receive when they are able to purchase products or services for a price less than the maximum amount they are willing to pay?

• A. Marginal cost
• B. Consumer surplus
• C. Price elasticity of demand
• D. Producer surplus

Answer: (B)

Verified step by step guidance

1. Understand the concept of willingness to pay, which is the maximum price a consumer is ready to pay for a product or service.
2. Recognize that when consumers pay a price lower than their willingness to pay, they gain an extra benefit or value from the transaction.
3. Identify that this extra benefit is called consumer surplus, which measures the difference between what consumers are willing to pay and what they actually pay.
4. Distinguish consumer surplus from other concepts: marginal cost relates to production cost, price elasticity of demand measures responsiveness to price changes, and producer surplus is the benefit producers receive.
5. Conclude that the concept describing the benefit consumers receive when paying less than their maximum willingness to pay is consumer surplus.