Suppose the benchmark competitive product has a price of $300,costs $200 to install,and averages $500 in usage and maintenance costs.Your product is priced at $400,costs $100 to install,and averages $400 in usage and maintenance costs.In this situation,the economic value of your product over the benchmark competitive product is ________.
A)-$200
B)-$100
C)$0
D)$100
E)$200

Question

Quizplus · Accepted Answer

The economic value of your product over the benchmark competitive product is calculated by comparing the total costs (price, installation, usage, and maintenance) of both products. The benchmark product's total cost is $300 (price) + $200 (installation) + $500 (usage and maintenance) = $1000. Your product's total cost is $400 (price) + $100 (installation) + $400 (usage and maintenance) = $900. Therefore, the economic value of your product over the benchmark is $1000 - $900 = $100.

Suppose the Benchmark Competitive Product Has a Price of $300,costs