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 themarginal cost: the cost of production.marginal benefit: the value of the resources used in production.marginal benefit: the highest price that a buyer is willing to pay for a product.marginal cost: the lowest amount the buyer is willing to pay for a product. The market price measures themarginal cost: the amount that buyer will actually have to pay.marginal benefit: the value of the resources used in production.marginal cost: the cost of production.marginal cost: what the buyer is willing to pay. The consumer will purchase the good or service only if the buyer's reservation price isequal to or higher than the market price.lower than the market price.higher than the market price.equal to the market price.

The correct option is:Marginal benefit: the highest price that a buyer is willing to pay for a…

Answered: When making this decision, the buyer's…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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

marginal cost: the cost of production.
marginal benefit: the value of the resources used in production.
marginal benefit: the highest price that a buyer is willing to pay for a product.
marginal cost: the lowest amount the buyer is willing to pay for a product.

The market price measures the

marginal cost: the amount that buyer will actually have to pay.
marginal benefit: the value of the resources used in production.
marginal cost: the cost of production.
marginal cost: what the buyer is willing to pay.

The consumer will purchase the good or service only if the buyer's reservation price is

equal to or higher than the market price.
lower than the market price.
higher than the market price.
equal to the market price.

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