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Assume a market has unit elastic demand, such that total expenditure E = P*Q , where P is price and Q is total industry quantity.
Assume a market has unit elastic demand, such that total expenditure E = P*Q, where P is price and Q is total industry quantity. Also, assume there are N identical firms with fixed (sunk) costs F and constant marginal cost c. If the industry Lerner Index can be written LI = A/N, where A is some parameter, then doubling fixed costs will
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