When a consumer compares the price of a good to the value of that good, he or she is really comparing:
A) the price of other substitute goods.
B) the value of the good to the costs associated with producing the good.
C) the value of the good to its opportunity cost.
D) the price of the good to the value of other substitute goods.

Question

Quizplus · Accepted Answer

When a consumer compares the price of a good to its value, they are essentially comparing the value of that good to the value of the best alternative use of the money they would have to spend on that good, hence comparing it to its opportunity cost. This allows them to determine whether or not purchasing the good is worth the cost.

When a Consumer Compares the Price of a Good to the Value