Which of the following best describes the behavior of consumers who are economic buyers in relation to consumer surplus and willingness to pay?

• A. They purchase goods only when the price is less than or equal to their willingness to pay, thereby gaining consumer surplus.
• B. They always pay more than their willingness to pay for goods.
• C. They buy goods regardless of the price, ignoring their willingness to pay.
• D. They avoid purchasing goods even if the price is below their willingness to pay.

Answer: (A)

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.
2. Recognize that consumer surplus is the difference between the consumer's willingness to pay and the actual price paid, representing the net benefit to the consumer.
3. Analyze the behavior of an economic buyer, who aims to maximize their utility by purchasing goods only when the price is less than or equal to their willingness to pay.
4. Note that if the price is less than the willingness to pay, the consumer gains a positive consumer surplus, making the purchase beneficial.
5. Conclude that economic buyers do not pay more than their willingness to pay, nor do they ignore prices or avoid beneficial purchases, so the correct behavior is purchasing only when price ≤ willingness to pay, thereby gaining consumer surplus.