Question

A firm has $1,500,000 in sales, a Lerner index of 0.57, and a marginal cost of $50, and competes against 800 other firms in its relevant market. Instruction: Enter your responses rounded to two decimal places. a. What price does this firm charge its customers

Answer 1

Answer:

the price the firm charge its customers is $116.28

Explanation:

a. The computation of the price the firm charge its customers is given below:

Lerner index  = Price - marginal cost ÷ Price

0.57 = Price - $50 ÷ Price

0.57Price = Price - $50

0.43Price = $50

Price = $116.28

hence, the price the firm charge its customers is $116.28

The same should be considered and relevant