Under the Lerner Index of market power definition, an existing perfectly competi

ID: 1092457 • Letter: U

Question

Under the Lerner Index of market power definition, an existing perfectly competitive firm

has zero market power because its marginal cost equal the market price.

has a positive market power because it makes a positive profit.

has the same market power as a monopoly.

is not qualified to apply the Lerner index.

has zero market power because its marginal cost equal the market price.

has a positive market power because it makes a positive profit.

has the same market power as a monopoly.

is not qualified to apply the Lerner index.

has zero market power because its marginal cost equal the market price.

Reason: The Lerner Index equals zero under perfect competition.

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