Determine optmal price that both firms should be charging

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Reference no: EM131160300

There are 2firms to consider here from 2 different indusrties. A firm in Indusrty A has MC of production=$150 and they know from historical experience that their Lerner index is 0.35.

A firm in Industry B has MC of production=$25 and they know from historical experience thet their Lerner index is 0.6

Determine the optmal price that both firms should be charging.

Articulate which firm is more likely to earn 'excess profits' in the ling run... and explain why this is your answer using your understanding of the connection between the Lerner index and industry concentration.

Reference no: EM131160300

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Determine optmal price that both firms should be charging : There are 2firms to consider here from 2 different indusrties. A firm in Indusrty A has MC of production=$150 and they know from historical experience that their Lerner index is 0.35. Determine the optmal price that both firms should be charging.

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