A consumer's reservation price is the
A)amount she will pay for a hotel or airline reservation.
B)minimum amount she will pay for a good or service.
C)price that maximizes her surplus.
D)maximum amount she will pay for a good or service.

Question

Quizplus · Accepted Answer

A consumer's reservation price is the maximum amount that she is willing to pay for a good or service. It represents the value that the consumer places on the good or service, and any price above this amount would lead the consumer to look for alternatives or not make the purchase. Therefore, the correct choice is (D) - the maximum amount she will pay for a good or service.

A Consumer's Reservation Price Is the