Business, 23.06.2020 23:01 tleppek6245

g efg manufacturing has a product that sells for $15 per unit, and the marginal cost is $5.00. a. compute the lerner index for efg manufacturing. b. if this index indicates market power, under what condition(s) will this market power last in the long-run

Answers: 1

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Answers

(a) 0.667 (b) The Lerner index helps in estimating of the market power of a firm. it measures the percentage markup that a firm is able to charge.

The conditions where this market power last in the long-run are; the pricing power, Factor mobility, Barrier to entry or exist.

Explanation:

Solution

Given that:

(A) The Lerner index is computed below:

Lerner index = (P-MC)/P

Thus,

($15-$5.00)/$15

=10/15

= 0.667

(B) The Lerner index assist in measuring of the market power of a firm. it measures the percentage markup that a firm is able to charge.

Index spans from a low value (0) to a higher value of (1)

When a firm has a higher value of index, it is able to charge over it;s marginal cost and thus has a greater monopoly power

Other conditions where market power last in the long run is as follows:

The pricing powerFactor mobilityBarrier to entry or exist

Answer from: Quest

x=3

step-by-step explanation:

this is really simple i saw that there was only one term (5x) and thought if that was 15 what would i have to multiply everything else to get it there? well if 5x became 15 then x would have to be 3 so plug the 3 in the x for the other equations and you get 15 for the other ones. so there you go. : )

Answer from: Quest

The business cycle is the periodic but irregular up-and-down movement in economic activity, measured by fluctuations in real gross domestic product (gdp) and other macroeconomic variables. a business cycle is typically characterized by four phases—recession, recovery, growth, and decline—that repeat themselves over time. economists note, however, that complete business cycles vary in length. the duration of business cycles can be anywhere from about two to twelve years, with most cycles averaging six years in length. some business analysts use the business cycle model and terminology to study and explain fluctuations in business inventory and other individual elements of corporate operations. but the term "business cycle" is still primarily associated with larger (industry-wide, regional, national, or even international) business trends.

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g efg manufacturing has a product that sells for $15 per unit, and the marginal cost is $5.00. a. co...