Lerner Index
From Conservapedia The Lerner index is a formula to quantify a firm's monopoly power:
- Lerner index = (P-MC)/P
where P is the price and MC is the marginal cost.
The index ranges from 0 (no monopoly power) to 1 (complete monopoly power when MC=0).
This index has been criticized for relying on MC, which is not usually known, and for being static rather than dynamic.
Categories: [Economics]
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☰ Source: https://www.conservapedia.com/Lerner_index | License: CC BY-SA 3.0
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