If the Lerner Index of Market Power is larger for businesses than for individuals in the market for airline travel, assuming identical costs for both consumer groups, this must mean that price for businesses is higher than for individuals. True False

If the Lerner Index of Market Power is larger for businesses than for individuals in the market for airline travel, assuming identical costs for both consumer groups, this must mean that price for businesses is higher than for individuals. True False

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter23: Managing Vertical Relationships

Section: Chapter Questions

Problem 4MC

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Question

If the Lerner Index of Market Power is larger for businesses than for individuals in the market for airline travel,
assuming identical costs for both consumer groups, this must mean that price for businesses is higher than for
individuals.
True
False

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