>
New Topic
>
Reply<
Esato Forum Index
>
General discussions >
Non mobile discussion
> Quick Maths Question
Bookmark topic
Okay quick one, my head is stuck 2day and this simple thing isnt working in my head
Equation: Lerner Index = (Price Minus Marginal Costs) / Price
Lerner index is 0.65, Marginal Cost is £35, whats P ? (price)
Thanks
Max
--
Posted: 2009-02-22 18:57:33
Edit :
Quote
starting with l = (p - m) / p
divide right side top and bottom by p gives
l = (1 - m/p) / 1
i.e.
l = 1 - m/p
take m/p to the left (making it positive) and bring the l to the right, this gives
m/p = 1 - l
i.e. 35 /p = 1 - .65
which is
35 /p = .35
from here you can see p must be 100. if not... take the p to the right and the .35 to the left giving
35/.35 = p
therefore p = 100
check by putting 100 back into the original equation
.65 = ( 100 - 35 ) /100
.65 = 65 / 100
.65 = .65
QED
--
Posted: 2009-02-22 19:23:20
Edit :
Quote
cheers mate, appreciate it
always forget i can divide both sides by p !!!
--
Posted: 2009-02-22 19:28:05
Edit :
Quote
you could also do this:
I = (p-m)/p
.65 = (p-35)/p
65/100 = (p-35)/p
65*p = 100*(p-35)
65*p = 100*p - 3500
100*p - 65*p = 3500
35*p=3500
p=3500/35
p=100
--
Posted: 2009-02-22 19:28:22
Edit :
Quote
New Topic
Reply
