Rapson Pure Water Solutions Corporation Has Developed a New Water

question 1

Multiple Choice

Rapson Pure Water Solutions Corporation has developed a new water purification system-model EN-78-that has been designed to outperform a competitor's best-selling water purification system. Model EN-78 has a useful life of 120,000 hours of service and its operating cost is $0.70 per hour. In contrast, the competitor's product has a useful life of 40,000 hours of service and has operating costs that average $1.20 per hour. The competitor's water purification system sells for $149,000. Rapson has not yet established a selling price for model EN-78.From a value-based pricing standpoint what range of possible prices should Rapson consider when setting a price for EN-78?

• A) $233,000 ≤ Value-based price ≤ $358,000
• B) $358,000 ≤ Value-based price ≤ $507,000
• C) $149,000 ≤ Value-based price ≤ $507,000
• D) $149,000 ≤ Value-based price ≤ $233,000

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Definitions:

Responsive

Showing a positive and quick reaction to something, either emotionally or by taking action.

Sensitive

Easily affected by external conditions or stimuli.

Psychosocial Crisis

A theory by Erik Erikson that describes eight stages of human development, each characterized by a different crisis that must be resolved for healthy personality development.

Basic Trust

A concept introduced by Erik Erikson, indicating the first stage of psychosocial development, where infants learn whether or not their world is trustworthy based on their caregivers' responsiveness and support.