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LERNER INDEX: The difference between price (p) and marginal cost (mc) as a fraction of price, that is [p-mc]/p. The Lerner index is usually taken as an indicator of market power because the larger the index, the larger the difference between price and marginal cost, that is, the larger the distance between the price and the competitive price. The Lerner index depends on the elasticity of demand. The Lerner index is also called the price-cost margin.
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DIAMOND-WATER PARADOX The apparently conflicting and perplexing observation that water, which is more useful than diamonds, has a lower price than diamonds. This paradox was proposed by economists in the 1800s as a means understanding the role utility plays in the demand price of a good by differentiating between total utility and marginal utility.
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BROWN PRAGMATOX
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Today, you are likely to spend a great deal of time wandering around the downtown area wanting to buy either a genuine down-filled comforter or a 200-foot blue garden hose. Be on the lookout for slightly overweight pizza delivery guys.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"I don't subscribe to the thesis, 'Let the buyer beware,' I prefer the disregarded one that goes, 'Let the seller be honest.'" -- Isaac Asimov, Author
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BNA
Bureau of National Affairs
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