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Willingness to Accept (WTA)
Willingness to Accept (WTA) is a measure of a good's value to an individual, defined as the absolute minimum payment a person would require to sell that good. This amount is also known as the seller's reservation price. A seller will always prefer to keep the item rather than sell it for an amount less than their WTA.
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Social Science
Empirical Science
Science
Economy
CORE Econ
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
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Willingness to Accept (WTA)
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The table below lists the maximum price five potential buyers are willing to pay for one unit of a specific good.
Buyer Willingness to Pay Alex $450 Ben $400 Carla $320 David $250 Eva $200 If the market price for this good is set at $350, what is the total quantity that will be demanded by this group?
Determining Market Price from Willingness to Pay
A group of five individuals are interested in purchasing a single unit of a particular product. The table below shows the maximum price each person is willing to pay.
Individual Maximum Price Willing to Pay Alex $50 Brenda $30 Charles $50 Diana $20 Edward $30 Based on this data, which statement accurately describes how the number of buyers changes as the price of the product is lowered?
Community Project Funding Analysis
An avid music fan was initially willing to pay a maximum of $150 for a ticket to a popular band's concert. A week before the show, after receiving an unexpected work bonus, their maximum willingness to pay for the same ticket increased to $250. Which economic principle does this change best illustrate?
You are given a list of the maximum prices that several different consumers are willing to pay for a single unit of a product. Arrange the following steps in the correct sequence to construct the market demand schedule for this product.
The Great Divergence: Productivity vs. Wages
A student needs a specific textbook for their course. The campus bookstore sells a new copy for $120. The student finds a used, but identical, edition of the same textbook for sale from another student. Assuming the student is a rational economic actor, what is the theoretical maximum they would be willing to pay for the used copy?
A company is considering launching a new product in two different markets. Market research reveals the following about potential customers' maximum willingness to pay:
- Market A: A wide and uneven distribution of willingness to pay, with significant gaps between the valuations of different consumer groups.
- Market B: A narrow distribution of willingness to pay, with most consumers' valuations clustered closely together around an average value.
Based on this information, what is the most likely difference in the market demand characteristics between these two locations?
Learn After
Reserve Price
Factors Influencing Willingness to Accept (WTA)
Market for Second-Hand University Textbooks
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An individual is selling a vintage concert poster they own. They have a strong sentimental attachment to it and have decided they would rather keep it than sell it for anything less than $75. A collector initially offers $60, which the owner declines. Later, the collector increases their offer to $90, and the owner agrees to the sale. Based on this scenario, what is the owner's willingness to accept?
Comparing Seller Valuations
Seller's Decision Point
A seller's willingness to accept for a used bicycle is $100. If they successfully sell the bicycle for $120, it demonstrates that their true willingness to accept was $120.
Match each seller's scenario to their correct Willingness to Accept (WTA), which is the minimum price they would agree to sell their item for.
Evaluating Seller Success
The absolute minimum price a seller requires to sell a good or service, below which they would prefer to keep the item, is known as their __________.
A student is selling a used graphing calculator. They have determined that the absolute minimum price they would sell it for is $50. Arrange the following events in the logical order they would occur for a successful transaction to take place from the seller's perspective.
Inferring Seller Valuation
An individual is selling a rare comic book. They have determined that the absolute minimum price they will part with it for is $500. They receive an initial offer of $450, which they immediately decline. A second potential buyer offers exactly $500. After considering the offer, the seller agrees to the sale. A third buyer then contacts the seller and offers $550, but the seller has already committed to the second buyer. Based on this information, what is the seller's willingness to accept?