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This is in contrast to willingness to pay (WTP), which is the maximum amount of money a consumer (a buyer) is willing to sacrifice to purchase a good/service or avoid something undesirable. [1] The price of any transaction will thus be any point between a buyer's willingness to pay and a seller's willingness to accept; the net difference is the ...
In microeconomics, consumers set their reservation price as the highest price they are willing to pay for goods or a service, while sellers set the lowest price at which they would sell. Similarly, in finance , the reservation price—also called the indifference price —is the value at which an investor would be willing to buy (or sell) a ...
According to the constructed preference view, consumer willingness to pay is a context-sensitive construct; that is, a consumer's WTP for a product depends on the concrete decision context. For example, consumers tend to be willing to pay more for a soft drink in a luxury hotel resort in comparison to a beach bar or a local retail store.
Just as the buyer reveals what he is willing to pay for a certain amount of a good, so too does the seller reveal what it costs him to give up the good. Additional information about market value is obtained by the rate at which transactions occur, telling observers the extent to which the purchase of the good has value over time.
Duration: The exclusive right to sell clause in the contract you establish with your real estate agent should have an expiration date, which might be anywhere from 30 days to six months or more ...
The value that a consumer gives to a good or service, can then be defined as their willingness to pay for it (in monetary terms) or the amount of time and resources they would be willing to give up for it. [2] For example, a painting may be priced at a higher cost than the price of a canvas and paints. If set using the value-based approach, its ...
Contingent valuation surveys were first proposed in theory by S.V. Ciriacy-Wantrup (1947) as a method for eliciting market valuation of a non-market good.The first practical application of the technique was in 1963 when Robert K. Davis used surveys to estimate the value hunters and tourists placed on a particular wilderness area.
The income of a market maker is the difference between the bid price, the price at which the firm is willing to buy a stock, and the ask price, the price at which the firm is willing to sell it. It is known as the market-maker spread, or bid–ask spread. Supposing that equal amounts of buy and sell orders arrive and the price never changes ...