Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 5

A firm has $1.5 million in sales, a Lerner index of 0.57, and a marginal cost of $50, and competes against 800 other firms in its relevant market.
a. What price does this firm charge its customers?
b. By what factor does this firm mark up its price over marginal cost?
c. Do you think this firm enjoys much market power? Explain.