While Fun Frames Incurs a Cost of $12 for a Pair

question 59

Multiple Choice

While Fun Frames incurs a cost of $12 for a pair of eyeglasses, Highwire, its competitor, manufactures a pair of glasses at $10. Both the companies are able to sell their glasses for a maximum of $30 per pair. Which of the following statements is true in this scenario?

• A) Fun Frames and Highwire have achieved differentiation parity.
• B) Fun Frames is a cost-leader when compared to Highwire.
• C) Fun Frames has created a greater economic value than Highwire.
• D) Highwire has a higher opportunity cost than Fun Frames.

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