A watchmaking company has priced one of its wristwatches at $210. Most of its competitors sell similar watches at $180. Selling anything less than $150 would result in a loss for the company. However, the absolute maximum a customer is willing to pay for it is $170. In this scenario, what is the reservation price of the wristwatch?
A) $150
B) $180
C) $170
D) $210

Question

Quizplus · Accepted Answer

The absolute maximum a customer would be willing to pay for a product is referred to as its reservation price, which in this case is $170.

A Watchmaking Company Has Priced One of Its Wristwatches at $210