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Suppose a company estimates the following for a product it sells: Tangible value the product provides: $ 2 5 Intangible value the product provides: $
Suppose a company estimates the following for a product it sells:
Tangible value the product provides: $
Intangible value the product provides: $
Costs customer must incur to purchase the product: $
The next best alternatives EVC costs to customer to purchase that product: $
Use these figures to calculate the EVC, Absolute EVC, and Relative EVC for this product.
b Which of these figures EVC Absolute EVC, or Relative EVC is most closely related to the economic concept of consumer surplus? Briefly explain.
c Briefly summarize the common mistakes managers can make when using EVC?
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