Question

Willingness to pay

a. measures the value that a buyer places on a good.
b. is the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept.
c. is the maximum amount a buyer is willing to pay minus the minimum amount a seller is willing to accept.
d. is the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it.

Answer 1

The correct answer is option a.

Step-by-step explanation:

The willingness to pay for a product can be defined as the maximum amount an individual is willing to procure or obtain a product. The price of a product lies between a consumer's willingness to pay and a seller's willingness to accept.

The willingness to accept is the minimum amount a seller is willing to accept to let go of a product. Willingness to pay indicates how valuable good is for the buyer.