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:

Evaluation Apprehension

Anxiety or concern about being judged by others, often affecting performance in tasks or decisions.

Deindividuation

Deindividuation refers to a psychological state where an individual loses self-awareness and a sense of individuality, often leading to uninhibited or norm-defying behavior, usually in group settings.

Anonymous

Describing someone or something that is unnamed or not identified by name, often used to maintain privacy or confidentiality.

Self-Aware

Having conscious knowledge of one's own character, feelings, motives, and desires.