The maximum price that a consumer is willing to pay for each unit bought is the ________ price.
A) market
B) reservation
C) consumer surplus
D) auction
E) choke

Question

Quizplus · Accepted Answer

The maximum price a consumer is willing to pay for each unit is known as the reservation price. This is the price point at which a consumer is just willing to make a purchase. Choice A, market price, is the actual price at which goods are being sold in the market. Choice C, consumer surplus, is the amount by which the consumer's reservation price exceeds the market price. Choice D, auction, refers to a sales event where buyers bid for goods, and the highest bid wins. Choice E, choke, is not a term commonly used in economics.

The Maximum Price That a Consumer Is Willing to Pay