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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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