A jewelry store has a discount for customers who purchase multiple pairs of earrings: after paying full price for one pair of earrings, the second pair is 15% off. John goes to the store and finds a pair of earrings he likes that is sold for $40 per pair, so he purchases two pairs for a total cost of $74. Which of the following MUST be true? A. John's willingness to pay for the first pair is no more than $74. B. John's willingness to pay for the second pair is at least $34. C. John's willingness to pay for the two pairs of earrings is at least $74. D. John's willingness to pay for the second pair is lower than his willingness to pay for the first pair.

Correct Statement is D

Explanation:

Provided information,

The Jewelry Store sells pair of earrings, where the discount is of 15% on the price of second pair.

This states that the consumer will always be willing to pay the cost of first pair in full, whenever the customer buys such pair, whether alone or with some additional pair.

Thus the willingness to pay for any pair after purchase of first pair of earrings will always be less than the cost of first pair, as the amount paid for first pair is $40 and that for second pair costing $40 but purchased for $34 as because there was discount on second pair.

In the given case John purchased the second pair because there was discount, else John has bought the same pair for $40.

Thus his willingness for second pair is always lower than the price of first pair.

Correct Statement is D