Refer to the above figure. The highest price that consumers would be willing to pay for quantity Q2 is
A) P2.
B) P0.
C) P1.
D) cannot be determined from the diagram.

Question

Quizplus · Accepted Answer

Consumer surplus is the difference between the highest price consumers are willing to pay (WTP) and the actual price they pay. In the given figure, the highest price that consumers would be willing to pay for quantity Q2 is represented by point A on the demand curve. The price corresponding to point A is P1. Therefore, the highest price consumers are willing to pay for Q2 is P1.

Refer to the Above Figure