Any consumer trying to decide whether to buy a given good or service will base the decision on his or her reservation price and the existing market price. When making this decision, the buyer's reservation price measures the

Question

Fitzgerald

Business

11 July, 15:18

Any consumer trying to decide whether to buy a given good or service will base the decision on his or her reservation price and the existing market price. When making this decision, the buyer's reservation price measures the

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Answers (1)

Know the Answer?

Tripod · Answer 1

The correct answer is: marginal cost.

Explanation:

The reservation price is the maximum amount a consumer is willing to pay for a good or service or the minimum amount a buyer is willing to accept to sell a product. The reservation price takes into account the marginal cost since, in this case, it represents the amount that the buyer will eventually pay.