Both Bison Autos and Sparrow Inc

question 76

Multiple Choice

Both Bison Autos and Sparrow Inc. incur a cost of $9,000 to manufacture a vehicle. However, the economic value created by Sparrow Inc. is more than that created by Bison Autos. What does this indicate?

• A) Bison Autos has a competitive advantage over Sparrow Inc.
• B) Both Bison Autos and Sparrow Inc. have achieved competitive parity.
• C) Sparrow Inc. can charge a premium price on its automobiles.
• D) Bison Autos has created a higher value gap than Sparrow Inc.

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Definitions:

Labor

The human effort, both physical and mental, used in the production process.

Average Cost

The cost per unit, determined by dividing the total production costs by the quantity of units produced.

Copper

A metal element with high thermal and electrical conductivity, often used in electrical wiring and construction materials.

Zinc

A chemical element with the symbol Zn and atomic number 30, known for its corrosion-resistant properties and wide use in galvanization and alloys.