A firm has $1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $50, and           competes against 800 other firms in its relevant market. a) What price does this firm charge its customers? b) By what factor does this firm mark up its price over marginal cost? c) Do you think that this firm enjoys much market power? Explain.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
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Chapter11: Price And Output Determination: Monopoly And Dominant Firms
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A firm has $1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $50, and           competes against 800 other firms in its relevant market.

  1. a) What price does this firm charge its customers?
  2. b) By what factor does this firm mark up its price over marginal cost?
  3. c) Do you think that this firm enjoys much market power? Explain.
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