Individuals and businesses require compensation for delaying consumption.Which of the following questions may contribute to the magnitude of the compensation?
A)Is there a possibility that the price may increase for the delayed good or service?
B)If current consumption is delayed is it possible that it may not be realized at all?
C)How badly does the firm or individual wish to consume now and what do they require for delaying?
D)All of the above are legitimate reasons to require additional compensation for delaying consumption.

Question

Quizplus · Accepted Answer

All of the above questions are relevant when considering the compensation required for delaying consumption. The possibility of a price increase or loss of the opportunity to consume altogether are factors that increase the value of immediate consumption, while the urgency of current consumption needs versus the benefits of delayed consumption must also be weighed.

Individuals and Businesses Require Compensation for Delaying Consumption