A firm has a marginal cost of $18 and charges a price of $27. The Lerner index for this firm is:
A. 0.67.
B. 0.50.
C. 0.75.
D. 0.33.
Answer: D
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Economists are often perceived as disagreeing with each other. Is this the way things really are?
A. No, economists agree on much more than is commonly supposed. B. No, the problem is that some economists are smarter than others. C. No, economists “stage” disagreements for public amusement. D. Yes, economists rarely agree on much of anything. E. Yes, economists are unable to analyze problems dispassionately.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
The economy is at the equilibrium shown as point a in the above figure. To restore the economy to potential GDP, the Fed should
A) buy government securities and thereby increase aggregate supply. B) sell government securities and thereby decrease aggregate demand. C) buy government securities and thereby decrease aggregate demand. D) buy government securities and thereby increase aggregate demand. E) sell government securities and thereby increase aggregate demand.
Elasticity provides a guide to both
a. market stability and change in revenue as price changes. b. responsiveness of quantity demanded to a change in price and market stability. c. responsiveness of quantity demanded to a change in price and change in revenue as price changes. d. technological change and change in revenue as price changes.