What is the willingness to pay in the economy?

willingness to pay is a reflection of the maximum amount that the consumer thinks that the product or service is worth it. When developing the required price for products and services, it is considered, although it is important to realize that it is not a final arbitrator. In addition to engaging in the price process, it is also considered to be conducting larger studies on how consumers interact with products and services. For example, surveys conducted by universities and universities have shown that the willingness will rise when people look at recognized and well -known universities and go down for smaller and less famous institutions. Families that appreciate education are generally worthwhile on it, while families that have not sent many members for university can appreciate higher education at a lower number. It can also be heavy with branding, with people who are willing to pay more for comparable brand products.

at products prices want withPolečnosti hit the price that most people are willing to pay, which also allows the company to generate profits. Sometimes people can place the value of the product below the value of production, which leaves the company a problem. If the product is at the time of the price that people pay, the company takes a loss, but if the price is more reasonably, the company does not have to make so many sales.

This concept also plays studies such as cost analyzes and benefits and effectiveness studies. People involved in such studies are usually tested with selection experiments. In these experiments, individuals are confronted with a number of items from which you can choose from and are asked a number of questions about the cost of these items. Modeling of this nature is also used for prices and for exploring how people respond to different prices; For example, prices ending $ 0.95 tend to be considered more acceptable than prices ending with random numbers, such as $ 0.43.

in a greater economic context we will look atAs people interact with prices can be very important. Understanding how consumers make a choice of purchase based on price, especially for luxury goods, is an important part of the study of how consumers generally make decisions. The willingness of payment of studies can be applied to everything from health care systems to food sales.