A customer picks a product over a similar product due to the __________ of the product.

• A. lower production cost
• B. higher willingness to pay
• C. higher equilibrium price
• D. greater supply

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'willingness to pay' (WTP), which refers to the maximum amount a consumer is ready to pay for a product based on the value or satisfaction they expect to receive from it.
2. Recognize that when a customer chooses one product over a similar alternative, it is often because they perceive that product as providing greater value or utility, which translates into a higher willingness to pay.
3. Note that lower production cost or greater supply typically affect the seller's side and market prices, but do not directly explain why a customer prefers one product over another.
4. Higher equilibrium price is a market outcome and does not necessarily indicate consumer preference; it could be influenced by supply and demand factors.
5. Therefore, the key reason a customer picks one product over a similar one is due to their higher willingness to pay for that product, reflecting their preference and perceived value.