The maximum price a consumer is willing to pay for an extra unit of a good or service when total utility is maximized is known as
A) demand.
B) marginal benefit.
C) quantity demanded.
D) total utility.
E) marginal utility.

Question

Quizplus · Accepted Answer

Marginal benefit represents the maximum price a consumer is willing to pay for an additional unit of a good or service, when total utility is maximized. This is because at the point where total utility is maximized, the consumer is obtaining the greatest satisfaction possible from consuming the good or service, and is therefore willing to pay the most for an extra unit. Choice A (demand) refers to the quantity of a good or service that consumers are willing and able to buy at a given price, while choice C (quantity demanded) refers to the specific quantity of a good or service that consumers are willing and able to buy at a given price. Choice D (total utility) refers to the total satisfaction or usefulness that a consumer derives from consuming a given amount of a good or service, while choice E (marginal utility) refers to the additional satisfaction or usefulness that a consumer derives from consuming an additional unit of a good or service.

The Maximum Price a Consumer Is Willing to Pay for an Extra