Question

Though the microwaves manufactured by Emergo Inc. and Sensation Electronics Inc. sell at the same price of $600 per unit, the economic value created by Emergo Inc. is more than that of Sensation Electronics Inc. In the context of this scenario, which of the following statements is true?a. Emergo and Sensation Electronics have achieved a competitive parity.b. Sensation Electronics has differentiated its products more than Emergo Inc. has.c. Emergo has a relative cost advantage over Sensation Electronics.d. Sensation Electronics has been able to create more producer surplus for itself than Emergo.

Answer 1

c. Emergo has a relative cost advantage over Sensation Electronics.

Step-by-step explanation:

Economic value is the efficiency to produce the microwaves. In case of efficiency Embergo is creating more economic value than Sensation.