In addition to the hard-drive-based Ipod, Apple produces a flash-based audio player. Its 512MB iPod Shuffle (which does not have a hard drive) sold for $99 in 2005. According to iSuppli, Apple's per unit cost of manufacturing the Shuffle was $45.37. What was Apple's price/marginal cost ratio? What was its Lerner Index? If we assume (possible incorrectly) that Apple acted like a short run profit maximizing monopoly in pricing its iPod Shuffle , what elasticity of demand did Apple believe it faced?