People might choose to use a debit card rather than cash for purchases because:

• A. Paying with a debit card reduces the price of goods below the market equilibrium.
• B. Debit cards eliminate the concept of willingness to pay in consumer decisions.
• C. Using a debit card can increase their consumer surplus by making transactions more convenient.
• D. Debit cards always offer higher interest rates on purchases compared to cash.

Answer: (C)

Verified step by step guidance

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. Recognize that paying with a debit card does not change the market equilibrium price of goods; prices remain the same whether paying with cash or debit card.
3. Consider how convenience affects consumer behavior: using a debit card can make transactions faster and easier, potentially increasing the consumer's satisfaction or utility.
4. Analyze that increased convenience can effectively increase consumer surplus because the non-monetary benefits (like time saved and ease of use) add value to the purchase experience.
5. Conclude that the main reason people might prefer debit cards over cash is due to the increased convenience, which enhances their overall consumer surplus, rather than changes in price or interest rates.