help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / The Lemer Index in the paper industry is 0

The Lemer Index in the paper industry is 0

Marketing

The Lemer Index in the paper industry is 0.58. Based on this information, a firm charging $3.25 per ream of paper should have a marginal cost of:

A) $0

B) $1.365

C) $1.885

D) $3.25

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

The answer is B).

The Lerner Index is computed as:

  • (price - marginal cost) / price

If the price is 3.25, and the Lerner Index is 0.58, the we have:

  • (3.25 - marginal cost) / 3.25 = 0..58
  • marginal cost = 3.25 - 3.25 * 0.58
  • marginal cost = 1.365

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)