Question

Evia Cycles Inc. incurs $400 to manufacture a bicycle, and the maximum price customers are willing to pay is $550 per unit. Archer Cycles Inc., its competitor, incurs $450 to manufacture a similar bicycle, and customers are willing to pay a maximum price of $620 for it. What does this indicate? Group of answer choices

Answer 1

Answer:

The answer is: Archer Cycles has been able to create a larger economic value for their products than Evia Cycles.

Explanation:

Economic value refers to the benefit provided by a product or service to its customers.

It means that Archer's bicycles provide a larger benefit to its users. They are probably better bicycles, have a prettier design, or are just considered better by their clients. Sometimes the taste of the customers determines how they value a product.