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Sagot :
The Lerner index for this firm is indeterminable
What is Lerner index?
Lerner index is the formula created by economist Abba P. Lerner to measure of market power of a firm. The formula of Lerner index is
Lerner index = [tex]\frac{P-MC}{P}[/tex]
P = good price set by the firm
MC = marginal cost of the firm
The average cost is not a marginal cost because the average cost calculates the costs incurred for each product produced, while the marginal cost is the change in costs incurred for each change in the product produced.
The marginal cost can equal to average cost only if the the average cost reach their lowest point. Apart from that, marginal cost and average cost will not be the same.
Thus, the Lerner index for this firm is indeterminable
Learn more about Lerner index here:
brainly.com/question/26656084
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