The introduction of satellite television systems would cause the Lerner Index for cable television to
A) become smaller.
B) increase.
C) change in accordance to the increase in market power of cable TV providers.
D) be unchanged.

Question

Quizplus · Accepted Answer

The Lerner Index measures a firm's market power. The introduction of satellite television systems increases competition, reducing the market power of cable TV providers, thus making the Lerner Index smaller.

The Introduction of Satellite Television Systems Would Cause the Lerner