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5. Atlantic computers sell specialized high end computers to business users. Their closest competitor is Ontario computers. Savings for Atlantic consumers come in the form
5. Atlantic computers sell specialized high end computers to business users. Their closest competitor is Ontario computers. Savings for Atlantic consumers come in the form of 50% reduced cost of labor, reduced electricity usage, and fewer software application licenses. However, in order to avail of these savings, Atlantic consumers have to install additional software called PESA. Ontario does not require this software. The data below is made available to you. Atlantic computers Ontario Computers 4,000 $500 Labor costs 8,000 $1,000 3,000 Electricity costs per year Software Application Licenses 1,500 2,000 Cost of installing PESA Price 18,800 TBD Cost of manufacturing for Atlantic is 9,000$ what is the true economic value of Atlantic's product? Assuming a 50% customer inducement (, what price should Atlantic computers charge for their computer? [Note: Assume that in this case, TEV-PV. You are therefore not required to calculate perceived value. The inducement will be sufficient to make the sale]. a. b. Assume that a skeptical customer claims that the savings on labor, electricity and software are not 50 %, but only 25% less than Ontario. Compute the perceived value of this customer. Once again, assuming a 50% inducement, calculate the price to this customer
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