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The Lerner index in the paper industry is 0.58. Based on this information, a firm charging $3.25 per ream of paper should have a marginal cost of:

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Tundexi

Answer:

Marginal cost = $1.365

Explanation:

The formula for calculating Learner Index is as follows:

Learner Index = (P - MC) / P  

0.58  = (3.25 - MC) / 3.25

3.25 - MC = 0.58*3.25

3.25 - MC = 1.885

MC = 3.25 - 1.885

MC = $1.365