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If Sealed Air sold its AirCap product for the same price as the competing product, how would the economic value change? Why shouldn't Sealed Air

  • If Sealed Air sold its AirCap product for the same price as the competing product, how would the economic value change? Why shouldn't Sealed Air do this, as a price equal to the competitor's price creates more economic value for the customer?
  • What price would Sealed Air charge for the AirCap product to produce a zero economic value? This would make more money for AirCap, but why would this be an unwise move?

Analysis
Cost of Purchase Generic Category Specific Cost Product A Product B Lifecycle Savings

Price Paid (after discounts and rebates)

$

$

$0.25

Delivery Cost

$

$

-$0.20

Packaging

$

$

$0.00

Inventory (holding cost)

$

$

$0.00

Financing Costs (loan interest)

$

$

$0.00

Owning Costs (insurance)

$

$

$0.00

Usage Costs (cost to use)

$

$

-$0.70

Maintenance

$

$

$0.00

Disposal Cost

$

$

$0.00

Re-Sales Value (negative number)

$

$

$0.00

Lifecycle Cost and Economic Value

$4.13

$4.78

-$0.65

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