Problem
According to one estimate, the parts for a Segway Human Transporter-which has five gyroscopes, two tilt sensors, dual redundant motors, ten microprocessors, and can travel up to 12.5 mph-cost at least $1,500 (Eric A. Taub, "Segway Transporter Slow to Catch On," San Francisco Chronicle, August 11, 2003, E4). Suppose that Segway's marginal cost is $2,000. Given that the Segway's price is $5,000, calculate the firm's price/marginal cost ratio, its Lerner Index, and the elasticity of demand it believes it faces (assuming that it is trying to maximize its short-run profit).
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.