The ability to ship products quickly may mean that:

• A. consumers experience a higher consumer surplus due to faster satisfaction of their willingness to pay
• B. producers face lower costs regardless of consumer demand
• C. consumer surplus is unaffected by delivery speed
• D. the market price always decreases as shipping speed increases

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of consumer surplus, which is the difference between what consumers are willing to pay for a good or service and what they actually pay. It measures the benefit consumers receive from purchasing at a market price lower than their maximum willingness to pay.
2. Step 2: Recognize that faster shipping increases the speed at which consumers receive the product, effectively increasing the utility or satisfaction they get from the purchase because they get the product sooner.
3. Step 3: Analyze how faster delivery affects consumer surplus. Since consumers value receiving the product sooner, their willingness to pay effectively increases or their satisfaction from the same willingness to pay is realized earlier, which can increase consumer surplus.
4. Step 4: Consider the other options: lower producer costs regardless of demand is unlikely because shipping speed often involves higher costs; consumer surplus being unaffected ignores the time value of satisfaction; and market price always decreasing is not guaranteed as price depends on many factors beyond shipping speed.
5. Step 5: Conclude that the most accurate statement is that consumers experience a higher consumer surplus due to faster satisfaction of their willingness to pay, as faster delivery enhances the value consumers derive from the product.