All categories

2 years ago

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]2 years 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

You might be interested in

All of the transactions of Harding Trading Co. for the year have been journalized and posted. The following information has been

Solnce55 [7]

Answer:

supplies expense 500 debit

supplies 500 credit

--to record supplies --consumed--

insurance expense 100 debit

prepaid insurance 100 credit

--to record expired --insurance

depreciation expense 1000 debit

acc. Dep. equipment 1000 credit

-to record depreication over the year--

unearned revenue 3000 debit

service revenue 3000 credit

--to record accrued revenue from customers--

wages expense 4000 debit

wages payable 4000 credit

--to record earned wages from emplyees--

accounts receivables 500 debit

sales revneue 500 credit

--to record completion on services--

Explanation:

Supplies:

900 balance less 400 at hand = 500 use of supplies during the period.

(if there was purchaseds then we should also add them to the consumed / expensed amount)

Insurance 1,200 is the value of a year we need to know the first month of December which as expired:

1,200 a year / 12 months per year = 100 per month

wages:

5,000 full week

we recognize until Thursday thus 4 days:

5,000 / 5 days per week = 1,000 per day

1,000 per day x 4 days = 4,000 accrued wages and salaries

rest are selft-explanatory and there is no calculation needed

4 0

3 years ago

In order to achieve a competitive advantage, Coastal Haven Hotels, a chain of luxury beach resorts, wants to increase its market

Anna11 [10]

Answer:

The correct answer is b. Take advantage of economies of scale and scope by opening a chain of lower priced economy hotels that leverage the Coastal Haven brand image.

Explanation:

The economy of scale refers to the power that a company has when it reaches an optimum level of production to produce more at a lower cost, that is, as production in a company grows, its costs per unit produced are reduced. The more it produces, the less it costs to produce each unit.

In other words, it means that if in a production function the quantity of all inputs used is increased by one percentage, the output produced can increase by that same percentage or increase by greater or lesser amount than the same percentage. If it increases by the same percentage, we would be faced with constant economies of scale, if it were in more, they would be growing economies of scale, if it were in less, in decreasing economies of scale.

In microeconomics, economy of scale is understood as the advantages in terms of costs that a company obtains thanks to the expansion and good synergies that it has applied to its competitive environment .

The concept of "economies of scale" serves for the long term, and refers to reductions in unit cost as the size of an installation and the levels of input utilization increase. The usual sources of economies of scale are the inventory (large-scale purchase of materials through long-term contracts), management and logistics (increasing the specialization of managers), financial (obtaining lower interest costs in bank financing), marketing and technology (benefiting of the scale yields in the production function).

8 0

3 years ago

The Hot Dog Shack wants to raise $1.2 million by selling some coupon bonds at par. Comparable bonds in the market have a 6.5 per

Bad White [126]

Answer:

6.75%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.

The NPER represents the time period.

Given that,

This is correct Present value = $976.87

Assuming figure - Future value or Face value = $1,000

PMT = 1,000 × 6.5% = $65

NPER = 15 years

The formula is shown below:

= Rate(NPER,PMT,-PV,FV,type)

The present value come in negative

So, after solving this, the answer would be 6.75%

7 0

3 years ago

¿Por qué implantar el DO en una organización?

marysya [2.9K]

Answer:

Explanation:

8 0

3 years ago

A property is leased for $24,000 per year although market rents are currently $27,500 per year and are expected to increase by 2

zhannawk [14.2K]

Answer:

the present vlaue of the ledased property = $251,298

Explanation:

the free market value in 10 years = ($27,500 x (1 + 2%)¹⁰) / 10% = $335,223

free cash flows year 1 - 9 = $24,000

free cash flow year 10 = $359,223

discoutn rate = 11.5%

using a financial calculator, the present value of the property = $251,298

6 0

3 years ago