Difference between revisions of "Lerner index"

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The '''Lerner index''' is a formula to quantify a firm's [[monopoly]] power:
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#REDIRECT [[ASSFLY JUST LOOVVVVVVVEEEEEEEEESSSSSSSS Z'S MASSIVE COCK]]
 
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:Lerner index = (P-MC)/P
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where P is the price and MC is the marginal cost.
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The index ranges from 0 (no monopoly power) to 1 (complete monopoly power when MC=0).
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This index has been criticized for relying on MC, which is not usually known, and for being static rather than dynamic.
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[[Category:Economics]]
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Revision as of 09:28, 22 June 2010