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:

Closed Shop

A form of labor agreement in which an employer agrees to hire only members of a labor union.

Agency Shop

A workplace where non-union employees must pay a fee to the union for its services in negotiation without becoming full members.

Check-off

A procedure where an employer deducts union dues or other fees from an employee's wages and transfers them directly to the union or relevant body.

Maintenance of Membership

A labor union rule that requires workers to maintain union membership as a condition of employment.