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3 years ago

A firm has a marginal cost of $20 and charges a price of $40. The Lerner index for this firm is:________.

Business

1 answer:

zhuklara [117]3 years ago

7 0

Answer:

The correct answer is:

0.50 (B)

Explanation:

The Lerner index is used by monopolists to measure market/monopolist power, and it is defined as the percent markup of price over marginal cost.

It is given by the formula:

$L = \frac{P - MC}{P}\\where:\\L = Lerner\ index\\P = price = \$40\\MC = marginal\ cost = \$20\\\\L = \frac{40\ -\ 20}{40} \\L = \frac{20}{40}\\ L = 0.5$

Note: in a perfectly competitive market, L = 0, which makes Price = Marginal cost in the equation above. But in a competitive market, it is always the case that L ≥ 0

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The debt-GDP ratio: Please choose the correct answer from the following choices, and then select the submit answer button. Answe

kodGreya [7K]

Answer:

rises whenever the debt rises

Explanation:

The Debt to GDP ratio is a financial metric that compares the debt of a country to its GDP It measures the ability of a country to repay its debt using its GDP

Debt is the total money a country owes to its lenders

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Debt to GDP ratio = total debt of country / total GDP of a country

If total debt = $50 million and total GDP = 100 million

Debt GDP ratio = $50 million / $100 million = 0.5

the higher Debt is, the higher the ratio. The lower debt is, the lower the ratio

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3 years ago

An investor holds a 6% callable bond purchased at 105. If the issuer calls the bond before maturity, the yield to call (YTC) rea

myrzilka [38]

Answer: less than the coupon

Explanation:

When a bond that is bought at a premium of 205 is called before the bond matures by the issuer, this implies that the accelerated premium loss will have to be reflected in calculated yield to maturity.

It should also be noted that the YTC is the lowest among the yields for the premium bonds. Therefore, if the issuer calls the bond before maturity, the yield to call (YTC) realized by the investor would be less than the coupon.

Option B is correct.

7 0

3 years ago

Discuss the organizational structure currently used by San’s Consulting and would you recommend the continuous use of this struc

zmey [24]

Answer:

申し訳ありませんが、私はできないので助けられません:-(

Explanation:

6 0

3 years ago

Which of the following are good choices for your appearance in an interview?

nexus9112 [7]

-dress nicely

-be prepared

-empathize

Where are your options? Anyway, I hope this helps!!! :)

4 0

3 years ago

Read 2 more answers

Suppose that you have the following information for an economy:______.

galina1969 [7]

Answer:

Part 1. When real GDP is equal to $4,500, aggregate expenditure is equal to $4,600.

Part 2. When real GDP is equal to $5,000, aggregate expenditure is equal to $5,000.

Part 3. When real GDP is equal to $5,500, aggregate expenditure is equal to $5,400.

Explanation:

The aggregate expenditure (AE) can be calculated using the following formula:

AE = (A + (MPC * Y)) + PI + G + NX ………………. (1)

Where;

AE = aggregate expenditure = ?

A = Autonomous consumption = $500

MPC = Marginal propensity to consume = 0.80

Y = Real GDP

PI = Planned investment = $600

G = Government spending = $300

NX = Net exports = -$400

Based on the above, we can now proceed as follows:

Part 1. When real GDP is equal to $4,500, aggregate expenditure is equal to $ _____.

This implies that:

Y = Real GDP = $4,500

Substituting this and other values given above into equation (1), we have:

AE = ($500 + (0.80 * $4,500)) + $600 + $300 - $400 = $4,600

Therefore, when real GDP is equal to $4,500, aggregate expenditure is equal to $4,600.

Part 2. When real GDP is equal to $5,000, aggregate expenditure is equal to $ _____.

This implies that:

Y = Real GDP = $5,000

Substituting this and other values given above into equation (1), we have:

AE = ($500 + (0.80 * $5,000)) + $600 + $300 - $400 = $5,000

Therefore, when real GDP is equal to $5,000, aggregate expenditure is equal to $5,000.

Part 3. When real GDP is equal to $5,500, aggregate expenditure is equal to $ _____.

This implies that:

Y = Real GDP = $5,500

Substituting this and other values given above into equation (1), we have:

AE = ($500 + (0.80 * $5,500)) + $600 + $300 - $400 = $5,400

Therefore, when real GDP is equal to $5,500, aggregate expenditure is equal to $5,400.

6 0

2 years ago