Two monopolies in different markets have identical

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Two monopolies in different markets have identical, constant marginal cost functions. (a) Suppose each faces a linear demand and the two demands are parallel. Which monopolist will have a higher Lerner index: the one whose demand is closer to the origin or the one whose demand curve is farther from the origin? EXPLAIN your answer. (b) Suppose their linear demands have identical vertical intercepts but different slopes. Which monopolist will have a higher Lerner index: the one with the flatter demand or the one with the steeper demand? EXPLAIN your answer. (c) Suppose their linear demands have identical horizontal intercepts but different slopes. Which monopolist will have a higher Lerner index: the one with the flatter demand or the one with the steeper demand? EXPLAIN your answer.

Reference no: EM13983936

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