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Assignment Five 3.7.08 - Assignment Five AGEC 505...

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Assignment Five. AGEC 505. Agricultural Market Structures. Spring 2008. Due: 11:30 AM, Friday, March 7, 2008. Turn in TYPED hard copy before class. Assignments turned in after 11:30 AM will be marked 10 percent off. This late policy will be strictly enforced . Assignments turned in after the deadline will be marked 10 percent off each day that they are late (for example, an assignment due on Friday that is turned in on Monday will be marked 40 percent off). Exceptions will be granted in advance by the instructor. Assignments must be typed. Fifty percent off for untyped work. READ : Chapter 10 1. (10 pts) Lerner Index a. (2 pts) Define and explain the Lerner Index, and explain what it is used for. b. (3 pts) Suppose that the producer of a hi-tech music machine has an inverse demand curve given by: P = 100 - 4Q d and a cost function given by C(Q) = 0.5Q 2 + 20Q, where P is the price of the music machine in USD/machines and Q is the quantity of music machines. Calculate the Lerner Index for this company.
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