If the demand for a firm's output is perfectly elastic, then the firm's Lerner Index equals

A) zero.
B) one.
C) infinity.
D) one-half.


A

Economics

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The tendency for people to behave in a riskier way or to renege on contracts when they do not face the full consequences of their actions is called:

A. moral hazard. B. adverse selection. C. counter information. D. collective bargaining.

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We're more likely to make mistakes with situations we face:

A. often, because we pay less attention. B. often, because they involve low payoffs. C. infrequently. D. with little warning.

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Adam Smith stressed specialization and division of labor as causes of economic growth.

Answer the following statement true (T) or false (F)

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A firm's short-run supply curve shows the relationship between price and quantity supplied.

Answer the following statement true (T) or false (F)

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