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    Question

    If the elasticity of demand is -2 and price charged by

    the firm is Rs.10 and quantity sold is 15 units. What is the Lerner’s Index of Monopoly power?
    A 1 Correct Answer Incorrect Answer
    B 1/2 Correct Answer Incorrect Answer
    C 1/9 Correct Answer Incorrect Answer
    D 1/4 Correct Answer Incorrect Answer
    E 2 Correct Answer Incorrect Answer

    Solution

    Lerner’s Monopoly Power is 1/e = ½.

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