Both Vibrant Phones Inc.and Oryxo Inc.incur a cost of $200 to manufacture a single unit of a cell phone.However, Vibrant Phones creates more economic value than what Oryxo does.What does this imply?

Question

Quizplus · Accepted Answer

Economic value created is the difference between a buyer's willingness to pay for a product or service and the firm's total cost to produce it. Since the cost of production is same for both the companies, the difference in economic value can only be possible when one company has been able to sell at a higher price than the other.