Consumers' willingness to pay for a good is used to derive the _____ for that good.
A)producer surplus
B)cost of production
C)supply curve
D)demand curve

Question

Quizplus · Accepted Answer

Consumers' willingness to pay is directly related to the demand for a good, so the answer is the demand curve. Option A is the difference between the price a producer sells a good for and the cost to produce it, which does not relate to willingness to pay. Option B refers to the expenses incurred in making a product, which is not directly related to the price consumers are willing to pay. Option C is the relationship between the quantity of a good supplied and its price, which is influenced by but not solely determined by willingness to pay.

Consumers' Willingness to Pay for a Good Is Used to Derive