Which of the Following Statements Is (Are) TRUE

question 30

Multiple Choice

Which of the following statements is (are) TRUE?
I. The Lerner index is zero for a perfectly competitive firm.
II. If P = $80 and MC = $60, the Lerner index = 0.25.
III. If the price elasticity of demand is 1.25, the Lerner index is 0.80.
IV. A higher price elasticity of demand leads to a higher price markup over marginal cost.

• A) I, II, and III
• B) I, II, III, and IV
• C) II and IV
• D) III

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Definitions:

Breeding Season

The specific time of year when a species typically reproduces, often synchronized with environmental conditions that maximize offspring survival.

Darwinian Puzzle

A term referring to phenomena or traits observed in nature that appear counterintuitive or challenging to explain through the lens of Darwin's theory of natural selection.

Monogamy

A mating system where an individual has only one mate during a breeding season or for a lifetime, promoting exclusive pair bonding and parental care.

Male Animals

Refers to the sex in many species that produces smaller gametes and typically has roles in mating and fertilization processes.