"You may purchase as much of our product as you like, provided that you pay us the maximum amount you would be willing to pay for that amount of the good."
Under normal pricing, if I buy a Big Mac, I just pay the announced price, say $2. If I buy a Big Mac, we know that I'm willing to pay AT LEAST $2 for it, since I did; but in all probability I'd be willing to pay somewhat more. Say I'd be willing to pay $2.50 rather than have to buy a Whopper. Then $2.50 is my "reservation price." Then my "consumer surplus" from buying the Big Mac at $2 is $.50--buying it made me 50 cents better off.
So under the Reservation Pricing scheme, the consumer surplus is zero. In the McDonald's case, I would say, "Give me a Big Mac." The cashier would say, "The price is your reservation price." And I'd fork over $2.50.
Clearly, the firm's terms are unenforceable. But my question is, if you do decide to purchase from the firm, are you morally obligated to obey the firm's announced terms? Should I pay $2.50?
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