The highest price that a buyer would be willing to pay for a product is
A)the market equilibrium price.
B)based on their income.
C)the value of the marginal benefit they would receive from the product.
D)above their reservation price, which is the lowest price the seller might charge.

Question

Quizplus · Accepted Answer

The highest price a buyer would be willing to pay for a product is based on the value of the marginal benefit they would receive from the product. It is determined by how much the buyer values the product, and this value is often based on the satisfaction or utility the product would bring to them. Therefore, choice C is correct. A is incorrect because market equilibrium price is determined by both buyers and sellers, and may not necessarily represent the highest price a buyer is willing to pay. B is incorrect because although a buyer's income may affect their ability to pay for a product, it does not necessarily determine the highest price they are willing to pay. D is incorrect because a buyer's reservation price is the maximum price they are willing to pay, not the minimum price the seller might charge.

The Highest Price That a Buyer Would Be Willing to Pay