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What information does a manager need to gather for a make-or-buy decision?
Lerner Indices
Measures of a firm’s market power based on the difference between price and marginal cost, normalized by the product's price.
Marginal Cost
The increase or decrease in the total cost incurred by producing one more unit of a good or service.
Lerner Index
A measure of a firm's market power, calculated as the difference between price and marginal cost, normalized by price.
Barrier to Entry
Factors that make it difficult for new firms to enter a market, which can include high startup costs, access to technology, and strict regulations.
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