the Lerner Index, L, is equal to (P - c)/P = 1/, where P = price, c = marginal cost and is the absolute value of the price elasticity of demand.

Product A: 0.01392 price per gram

Marginal Cost: 0.01198price per gram

Calculate the Lerner index for product A, using its price per gram as 'P', and using 0.01198 as the marginal cost. Once you've done that, use the Lerner Index to calculate the price elasticity of demand,, of the good in question.

Lerner Index (P - c)/P =

(Absolute value of) Price elasticity of demand, = ____________________