Final answer:
Consumer willingness to pay is the extent to which customers in the target market are able and willing to pay a product's price, shaped by the law of demand, and results in consumer surplus if the market price is below what they're willing to pay.
Step-by-step explanation:
The question addresses the concept of consumer willingness to pay, which is fundamental in understanding market dynamics and consumer surplus. What customers in the target market are able and willing to pay for a product's price is described as their willingness to pay. According to the law of demand, there is an inverse relationship between price and quantity demanded. As the price increases, the quantity demanded typically decreases, and vice versa, with consumers adjusting their consumption based on price changes and their perceived utility. In cases where consumers are willing to pay more than the current market price, the difference between what they are willing to pay and what they actually pay is referred to as consumer surplus, indicated as the area above the market price and below the demand curve.