Which activity would a consumer most likely perform to maximize their consumer surplus?

• A. Purchase a product when their willingness to pay exceeds the market price
• B. Refuse to buy any product regardless of the price
• C. Buy a product only when the market price equals their willingness to pay
• D. Pay more than their willingness to pay for a product

Answer: (A)

Verified step by step guidance

1. Understand the concept of consumer surplus: it is the difference between what a consumer is willing to pay for a good or service and what they actually pay.
2. Recognize that to maximize consumer surplus, a consumer should only purchase a product when their willingness to pay is greater than the market price, ensuring they gain a positive surplus.
3. Analyze the options given: buying when willingness to pay exceeds price, refusing to buy regardless of price, buying only when price equals willingness to pay, or paying more than willingness to pay.
4. Eliminate options that do not maximize surplus: refusing to buy yields zero surplus, buying only when price equals willingness to pay yields zero surplus, and paying more than willingness to pay results in negative surplus.
5. Conclude that the activity that maximizes consumer surplus is purchasing a product when the willingness to pay exceeds the market price.