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      Question

      If price charged by the firm is Rs.10 and quantity sold

      is 15 units. Marginal cost is Rs. 5. What is the Lerner’s Index of Monopoly power?
      A 1 Correct Answer Incorrect Answer
      B 0.5 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 P-MC/P = 10-5/10 = 0.5

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