Explain firm competes against other firms in relevant market
A firm has $1 million in sales, a Lerner index of 0.65, and a marginal cost of $35, and competes against 1,000 other firms in its relevant market. Do you think this firm enjoys much market power? Explain.
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A town Barbara shop can accommodate 35 customers per day. The manager has determined that if two more additional barbers are hired, the shop can accommodate 80 customers per day. What are the design and effective capabilities for the barber shop.
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