Evia Cycles Inc. incurs $400 to manufacture a bicycle, and the maximum price customers are willing to pay is $550 per unit. Archer Cycles Inc., its competitor, incurs $450 to manufacture a similar bicycle, and customers are willing to pay a maximum price of $620 for it. What does this indicate?
A. Both Evia Cycles and Archer Cycles have achieved differentiation parity.
B. Evia Cycles has a competitive advantage over Archer Cycles.
C. Archer Cycles has created a greater economic value than Evia Cycles.
D. Both Evia Cycles and Archer Cycles have achieved cost parity.
Answer: Archer Cycles has created a greater economic value than Evia Cycles.