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Author Question: If the demand for a firm's output is perfectly elastic, then the firm's Lerner Index equals A) ... (Read 31 times)

cmoore54

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on: Jul 1, 2018
If the demand for a firm's output is perfectly elastic, then the firm's Lerner Index equals
 
  A) zero.
  B) one.
  C) infinity.
  D) one-half.

Question 2

In a competitive market where the elasticity of the market demand curve is -2, the elasticity of the supply curve is 1, and an individual firm faces a residual demand curve with an elasticity of -98. What happens to the individual firm's residual demand curve when the number of firms serving this market declines?
 
  A) It becomes less elastic.
  B) It becomes more elastic.
  C) It does not change.
  D) It cannot be determined.
Microeconomics ¦ Perloff ¦ 8th Edition
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miss.ashley

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Reply #1 on: Jul 1, 2018
Answer to Question 1

A

Answer to Question 2

A


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