Question

Mobius Electronics incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario?

Answer 1

the economic value created in this scenario $800

Step-by-step explanation:

Given;

Cost to produce cell phone = $350

Company's management price for the cell phone = $600

Customer's perceived price = $800

Now,

The economic value is that maximum value of a product that a customer is willing to pay.

Here,

the customers are expecting it to be $800

Hence,

the economic value created in this scenario $800