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Old Product is sold at $5 and Improved Product delivers $2 more in value to customers than Old Product. Improved Product cost $3 per unit to make.
What is the reference price for Improved Product?
What is the differential value of Improved Product in comparison to Old Product?
What is the total value of Improved Product?
What range would you suggest to marketing for pricing Improved Product?
Assume that a firm produces a consumer product at a variable cost of $7.25 and has fixed cost of $75,000 per month. Currently the firm sells 14,000 units per month priced at $
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