A firm has $2.5 million in sales, a Lerner index of 0.50, and a marginal cost of $10, and competes against 100 other firms in its relevant market. By what factor does this firm mark up its price over marginal cost?

A firm has $2.5 million in sales, a Lerner index of 0.50, and a marginal cost of $10, and competes against 100 other firms in its relevant market. By what factor does this firm mark up its price over marginal cost?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 1SQ

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A firm has $2.5 million in sales, a Lerner index of 0.50, and a marginal cost of
$10, and competes against 100 other firms in its relevant market. By what factor does this firm mark up its price over marginal cost?

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