The Amount of Money That a Customer Is Willing to Pay

question 151

Multiple Choice

The amount of money that a customer is willing to pay for a service is its _____________.

• A) value
• B) margin
• C) cost
• D) differentiation

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Definitions:

Input Price Ratio

The ratio of the prices of the inputs used in the production of goods or services.

Absolute Advantage

A condition in which a country, individual, or company can produce a good or service at a lower cost per unit than competitors can.

Comparative Advantage

The ability of a country, individual, or company to produce a good or service at a lower opportunity cost compared to others.

Trade

The act of buying, selling, or exchanging goods and services between people or countries.