Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST3: The Stock Market: Its Function, Performance, And Potential As As Investemtn Opportunity
Section: Chapter Questions
Problem 3CQ
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Question
What is the value of the Lerner index for a company that has demand function Q = 220 - 4P and cost function C = 500 + Q^2?
A. 1/19
B. 1/9
C. 1/4
D. 1/2
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Learner's index is used to measure monopoly power. It shows how greater is price from its marginal cost.
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