Blauvelt Electronics Corporation has developed a new instrument-model GZ-29-that has been designed to outperform a competitor's best-selling instrument. Model GZ-29 has a useful life of 30,000 hours of service and its operating cost is $3.20 per hour.In contrast, the competitor's product has a useful life of 10,000 hours of service and has operating costs that average $5.60 per hour. The competitor's instrument sells for $149,000. Blauvelt has not yet established a selling price for model GZ-29.From a value-based pricing standpoint, what is the differentiation value offered by GZ-29 relative to the competitor's offering for each 30,000 hours of service?
A. $370,000
B. $205,000
C. $72,000
D. $245,000
Answer: A
Business
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