An Unregulated Industry Has a Lerner Index of Zero

question 85

Multiple Choice

An unregulated industry has a Lerner index of zero.These numbers:

• A) reveal that social welfare would be improved by regulating the firms.
• B) are consistent with the industry being monopolistically competitive.
• C) are consistent with the industry being perfectly competitive.
• D) reveal that social welfare would be improved by regulating the firms and are consistent with the industry being monopolistically competitive.

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Definitions:

Decree

An official order issued by a legal authority, often having the force of law.

Federal Statute

A law enacted by the United States Congress that applies nationwide.

Legal Force

The effectiveness or binding power of a legal document, law, or regulation.

Injunction

A court order that either restrains a party from doing or compels a party to do a specific act.