Homework answers / question archive / The Lerner Index A firm has $1 Million in Sales, a Lerner Index of 065 and a marginal cost of $35 and competes against 1,000 other firms in its relevant market   a What price does the firm charge it customers? Show formula to explain how do this b By what factor does this firm mark up its price over marginal cost? c Do you thinkthis firm enjoys much market power? Explain your findings   Show how the Lerner Index is important in this problem?

The Lerner Index A firm has $1 Million in Sales, a Lerner Index of 065 and a marginal cost of $35 and competes against 1,000 other firms in its relevant market   a What price does the firm charge it customers? Show formula to explain how do this b By what factor does this firm mark up its price over marginal cost? c Do you thinkthis firm enjoys much market power? Explain your findings   Show how the Lerner Index is important in this problem?

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The Lerner Index

A firm has $1 Million in Sales, a Lerner Index of 065 and a
marginal cost of $35 and competes against 1,000 other firms in its relevant
market

a What price does the firm charge it customers? Show
formula to explain how do this

b By what factor does this firm mark up its price over
marginal cost?

c Do you thinkthis firm enjoys much market power? Explain
your findings

Show how the Lerner Index is important in this problem?