Asked by
Randy Cooper
on Oct 25, 2024
Verified
What is the value of the Lerner index under perfect competition?
A) 1
B) 0
C) infinity
D) two times the price
Lerner Index
A measure of a firm's market power, calculated as the difference between price and marginal cost relative to price.
Perfect Competition
A market structure characterized by a large number of small firms, identical products, perfect information, and no barriers to entry or exit.
- Comprehend the principle of the Lerner index and its utilization in evaluating monopoly strength.
Verified Answer
ND
Learning Objectives
- Comprehend the principle of the Lerner index and its utilization in evaluating monopoly strength.