📐 Lerner Index Calculator
Measure a firm’s degree of market power with the Lerner Index, calculated from its price and marginal cost.
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What is the Lerner Index?
The Lerner Index is an economics measure of a firm’s market power — how much its price exceeds its marginal cost, expressed as a proportion of the price.
The formula
Lerner Index = (Price − Marginal Cost) / Price. The index ranges from 0 (a perfectly competitive firm pricing at marginal cost) to close to 1 (very strong market/monopoly power).
This calculator is for general economics education.
Last reviewed August 2026