Question
In: Economics
The buyer's reservation price for a particular good or service is the:
The buyer's reservation price for a particular good or service is the:
Multiple Choice
price the buyer must pay to ensure he or she gets it.
smallest price the buyer would be willing to pay for it
same as the market price.
largest price the buyer would be willing to pay for it.
Solutions
Expert Solution
Answer is largest price the buyer would be willing to pay for it.
Buyers reservation price can be defined as, in order to buy a particular commodity the largest or maximum price or value that a buyer is willing to pay. In other words, it the highest price that a consumer is willing to pay to purchase a commodity or good.
Rahul Sunny answered 1 year agoRelated Solutions
When a buyer's willingness to pay for a good is equal to the price of the good, the
When a buyer's willingness to pay for a good is equal to the price of the good, the buyer's consumer surplus for that good is maximized. price of the good exceeds the value that the buyer places on the good. buyer is indifferent between buying the good and not buying it. buyer will buy as much of the good as the buyer's budget allows.
Working with the following data for a particular good, X: Price  
Working with the following data for a
particular good, X:
Price Quantity
Demanded
$6.00/unit 0
$5.00/unit 100
$4.00/unit 200
$3.00/unit 300
$2.00/unit 400
$1.00/unit 500
$0.00/unit 600
Using graph paper or some other charting process (but don’t do
it completely free-hand, accuracy counts in this assignment), draw
a graph of the demand curve for good X. Remember: The
vertical axis should be Price; the horizontal axis should be
Quantity.
Now draw another graph showing on the vertical axis the Total
Revenue associated with each of the above values for...
Suppose the price of a good is $100. Suppose when a particular firm producing this good produces...
Suppose the price of a good is $100. Suppose when a
particular firm producing this good produces 1000 units a week, its
average cost is $90. This firm operates in a competitive
market and therefore, can sell whatever quantity it wants to sell
at this price. What profit would this firm be making
each week?
Is the answer $10000?
The more price elastic is the demand for a good or service, the higher will be...
The more price elastic is the demand for a good or service, the
higher will be the acutal margin. Do you agree with this statement?
Explain.
Explain the demand curve, using an example of a particular good or service. Describe the difference...
Explain the demand curve, using an example of a particular good
or service.
Describe the difference between a change in the quantity
demanded--movement along the curve--and change in the overall
demand--shifting of the curve itself.
Assume that an effective government-imposed price on a particular good. The price is set below equilibrium....
Assume that an effective government-imposed price on a
particular good. The price is set below equilibrium. Now, the
imposed price is removed.
True, False, or Uncertain: Consumer spending on the good will
increase only if demand is inelastic. Explain your answer.
Assume that an effective government-imposed price on a particular good. The price is set below equilibrium....
Assume that an effective government-imposed price on a
particular good. The price is set below equilibrium. Now, let the
imposed price be removed. True, False, or Uncertain: Consumer
spending on the good will increase only if demand is inelastic.
Explain your answer. TRUE FALSE Uncertain Explanation:
1.) The presence of a price control in a market for a good or service usually...
1.) The presence of a price control in a market for a good or
service usually is an indication that
A. an insufficient quantity of the good or service was being
produced in that market to meet the public’s need.
B. the usual forces of supply and demand were not able to
establish an equilibrium price in that market.
C. policymakers believed that the price that prevailed in that
market in the absence of price controls was unfair to buyers...
When the price of a good or service is low enough, it will encourage consumers to...
When the price of a good or service is low enough, it will
encourage consumers to buy. However, the price also has to be high
enough to encourage producers to sell. In this way, both parties
benefit from the sale. In order to calculate producer surplus,
sellers must understand their direct costs and their – costs, while
consumers must consider their – price based on the value they place
on a particular good or service.
• When a seller decides to change his price for a particular good, will quantity demanded...
• When a seller decides to change his price for a particular
good, will quantity demanded change drastically? And what will
happen to the total revenue, will it increase or fall?
•Will individuals form teams or firms in all settings?
•Economic profit is usually lower than accounting profit. A firm
that makes zero economic profit is said to be earning normal
profit. Is zero economic profit bad for a firm?
•Discuss the difference between monopolistic competition and
oligopoly.
•What makes...
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