Smart consumers who will not pay $150 for a designer T-shirt make this choice because
A) their marginal costs from this t-shirt are less than $150.
B) they are willing to pay more than $150.
C) their marginal benefits from this t-shirt are less than $150.
D) their quantity demanded is greater than one t-shirt.
E) their marginal benefits from this t-shirt are more than $150.

Question

Quizplus · Accepted Answer

Smart consumers who do not pay $150 for a designer T-shirt make this choice because their marginal benefits from this T-shirt are less than $150. This means that they do not perceive the additional utility from the T-shirt to be worth the price they would have to pay for it. In order for a consumer to purchase a good or service, the perceived marginal benefits must be greater than or equal to the price.

Smart Consumers Who Will Not Pay $150 for a Designer