题目
题目

ECON 4001.01 SP2025 (19496) Week 10 quiz

单项选择题

What is the value of the Lerner index under perfect competition? 

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标准答案
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思路分析
First, recognize the Lerner index as a measure of market power, defined as L = (P − MC) / P, where P is price and MC is marginal cost. In a perfectly competitive market, firms are price takers, meaning they face a horizontal demand curve at the m......Login to view full explanation

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类似问题

Comparing your answers to the previous two questions, at a price of $8 Salt City Donut’s markup is [ Select ] larger smaller than its inverse elasticity, meaning that it should [ Select ] raise lower its price.  

Salt City Donuts is a local donut shop selling artisanal donuts such as a maple bacon donut with real bacon on top, a stuffed peaches and cream variety, and a full breakfast donut featuring egg and sausage on top. Salt City Donuts has marginal cost of $2 per donut. The donut shop knows that the price elasticity of demand for their donuts is -4 when they are charging a price of $8. The firm’s markup is:

A monopolist sells 2000 units of its product at a price of $50 per unit. The monopolist's marginal cost is $39, and its fixed cost is $8. Calculate the Lerner index of market power for the firm. (Provide your answer to 2 decimal places.)

When price elasticity of demand = -4, the optimal markup on cost is:

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