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Evia Cycles Inc

Question 40

Multiple Choice

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?


A) Both Evia Cycles and Archer Cycles have achieved differentiation parity.
B) Evia Cycles has a competitive advantage over Archer Cycles.
C) Archer Cycles has created a greater economic value than Evia Cycles.
D) Both Evia Cycles and Archer Cycles have achieved cost parity.

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