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An industry is known to face market price elasticity of demand =3 (Assume this elasticity as
constant as the industry moves along its demand curve.) The marginal cost of each firm in this
industry is $10 per unit, and there are five firms in the industry. What would the Lerner Index be
at the Cournot equilibrium in this industry?

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An industry is known to face market price elasticity of demand =3 (As.pdf

  • 1. An industry is known to face market price elasticity of demand =3 (Assume this elasticity as constant as the industry moves along its demand curve.) The marginal cost of each firm in this industry is $10 per unit, and there are five firms in the industry. What would the Lerner Index be at the Cournot equilibrium in this industry?