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ahrayia [7]
1 year ago
13

A firm has a marginal cost of $20 and charges a price of $40. the lerner index for this firm is? 0.33. 0.20. 0.50. 0.75.

Business
1 answer:
anzhelika [568]1 year ago
7 0

A firm has a marginal cost of $20 and charges a price of $40. the lerner index for this firm is 0.50.

<h3>What is Lerner index?</h3>

Lerner index, in economics is a measure of the market power of a firm. Formalized by the Russian-British economist Abba P. Lerner in 1934.

The Lerner index is expressed in the following formula:

Lerner index = P - MC/P

where P represents the price of the good set by the firm and MC represents the firm's marginal cost.

The index measures the percentage markup that a firm is able to charge over its marginal cost.

The index ranges from a low value of 0 to a high of 1.

The higher the value of the Lerner index, the more the firm is able to charge over its marginal cost, hence the greater its monopoly power.

To learn more about Lerner Index, refer

brainly.com/question/19091231

#SPJ4

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4 0
3 years ago
converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as:
Nikitich [7]

Converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as aggregate planning.

Aggregate planning is a method for developing a business by arranging a management to the production and demands. In this method, the quarterly and annual business plans are converted into broad output and labor requirements for the intermediate term. This intermediate term may last from 4 to 12 months.

In this period of time the company will hire new employees to make enough output to satisfy the demands and thereby maximizing the profit with a minimum cost.

Aggregate planning ensures the efficiency and production of a company. Usually it is done as a prior activity to obtain a continuous production facility.

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5 0
9 months ago
"You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 6 percent, –13 percent, 24 per
Vanyuwa [196]

Answer:

6.80%

Explanation:

The average nominal returns is the sum of the returns for 5 years divided by the number of returns considered( i.e 5, 5 returns for 5 years)

average nominal returns=(6%-13%+24%+18%+15%)/5

average nominal returns=10.00%

The Fisher's equation is shown thus:

(1 + i)  = (1 + r) (1 + π)

i=nominal return=10.00%

r=average real return=the unknown

π=inflation rate=3%

(1+10.00%)=(1+r)*(1+3%)

1.10=(1+r)*1.03

1+1=1.10/1.03

r=(1.10/1.03)-1

r=6.80%

7 0
2 years ago
The sticky-price theory helps explain what feature of the aggregate demand and aggregate supply model?
zhuklara [117]

Answer:

The stick price theory helps to explain the upward sloping shape of the aggregate supply curve.

Explanation:

The price tends to be sticky for a number of reasons.  

  1. Firms will need to incur menu costs if they constantly change prices
  2. Frequent change in prices may annoy the customers
  3. The wage rates remain the same even after change in price because the  wages are based on contracts

The short-run aggregate supply curve is upward sloping because of the stickiness of price, there is a positive and direct relationship between output and price. Due to the high expected price level in the short run, the firms will expect the input prices to rise along with an increase in the product price.  

To counter the increase in inputs price, the product price is kept high. The higher price provides motivation to produce more. That's why the short-run aggregate supply curve is upward sloping.

7 0
3 years ago
you hear about an economy with no change in the number of workers or capital. yet, production increases. what idea does this ill
olasank [31]

Answer:

It might be because of an increase in efficiency in the workforce or advances in technology. Hope it helps :)

Explanation:

8 0
3 years ago
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