Question

    If price charged by the firm is Rs.10 and quantity sold is 15 units. Marginal cost is Rs. 5. What is the Lerner’s Index of Monopoly power?

    A 1 Correct Answer Incorrect Answer
    B 0.5 Correct Answer Incorrect Answer
    C 1/9 Correct Answer Incorrect Answer
    D 1/4 Correct Answer Incorrect Answer
    E 2 Correct Answer Incorrect Answer

    Solution

    Lerner’s Monopoly Power is P-MC/P = 10-5/10 = 0.5

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