Understanding Consumer Behavior: Willingness to Pay for an Apartment

True or False: Keeping his maximum willingness to pay for an apartment in mind, Jake will not buy the apartment because it would be worth less to him than its market price of $300,000.

Answer:

TRUE

Explanation:

True it is that: Keeping his maximum willingness to pay for an apartment in mind, Jake will not buy the apartment because it would be worth less to him than its market price of $300,000.

Generally consumers respond to value as a matter of fact consumers can pay more than the list price if they think it will give them higher value than the market price.

Consumers don't purchase products primarily for their functions, hence Jake will not pay for the house because of his maximum willingness to pay.

A customer buys a product for the perceived benefit he will gain from it. This perceived benefit, in addition to his opinion of the product, are what create customer perceived value.

How do consumers determine the value of a product?

Consumers determine the value of a product based on the perceived benefit they will gain from it, in addition to their opinion of the product. This perceived benefit and opinion create the customer's perceived value.