Author Question: The Lerner Index is A) the ratio of the difference between price and marginal cost to price. B) ... (Read 61 times)

wenmo · **on:** Jul 1, 2018

The Lerner Index is

A) the ratio of the difference between price and marginal cost to price.
B) equal to (Price - MC)/Price.
C) a measure of market power.
D) All of the above.

Question 2

In a competitive market where the elasticity of the market demand curve is -1.5, the number of firms is 20, and an individual firm faces a residual demand curve with an elasticity of -68. What is the elasticity of the supply curve?

A) 0.5
B) 1.2
C) 2
D) Cannot be determined.