Question

If the consumer is willing to pay a price higher than the actual price of a product, then the consumer will not buy the product because the consumer surplus will be negative.
True / False.

Answer 1

Answer: False

Explanation: Consumer surplus can be calculated by subtracting the amount a consumer actually pays with the amount a consumer is willing to pay.

Therefore, if a consumer is willing to pay a higher price than in the market for a particular good or service that means he is doing so out of positive satisfaction that he gets from consuming that commodity  and the consumer is in surplus.

Hence from the above we can conclude that the above statement is false.