REFLECTIONS ON LERNERS INDEX OF MONOPOLY POWER

Lerner's index of monopoly power is considered in light of four axioms or principles the index should exhibit. The index is then defined for various types of market, involving externality, dynamics, increasing returns to scale, multiproduction, price discrimination and non-zero c ross-elasticities of demand. The role of monopoly profit as opposed to non-competitive distortions becomes more important with greater gener ality. A supplementary index is defined to measure rents to technology .