Question

Willingness to pay

1. measures the maximum price a buyer is willing to pay minus the minimum price a seller is willing to accept.

2. the maximum price that a buyer is willing to pay for a good.

3.the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the good.

4.the maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for it.

Answer 1

Willingness to pay -
2. the maximum price that a buyer is willing to pay for a good. A rational consumer will try to purchase a good only when the price is equal to or less than his/her willingness to pay.

The maximum price a buyer is willing to pay for a product minus the amount the buyer actually pays for it is known as  Consumer Surplus and the amount a seller actually receives for a good minus the minimum amount the seller is willing to accept for the goods is the porducer's surplus.

answered by: anonymous