Monopoly power to calculate the firms monopoly power

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A firm in the market for designer jeans has some degree of monopoly power. The demand curve it faces has a price elasticity of demand of -2, while the price elasticity demand of the market is -1.25. Moreover, the firm has a constant marginal cost of $50. Given the information, use the Lerner Index of Monopoly Power to calculate the firm's monopoly power.

L = ___ (Round answer to two decimal places)

Reference no: EM13886561

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