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Lerner Index Calculator — result sheet
Calculate the price-cost markup as a share of price from an entered price and marginal cost.
Inputs used
Results
Visual chart
Breakdown
Calculation steps
Returned data table
Formula and methodology
Formula: Lerner index = (P − MC) ÷ P.
The Lerner index expresses the difference between price and marginal cost relative to price. This calculator shows both the raw price-cost markup and its percentage form so users can understand the index without treating it as a stand-alone diagnosis of competition, legality, profitability, or optimal pricing.
This result follows the calculator's declared inputs, precision, validation boundaries, and model limits.
Input contract
- Price — currency units; minimum 1.0E-6; maximum 1.0E+15
- Marginal cost — currency units; minimum 0; maximum 1.0E+15
Worked example
| Input | Value |
|---|---|
| Price | 100 |
| Marginal cost | 70 |
The price-cost markup is 30 currency units and the Lerner index is 0.30, or 30%.
Assumptions and limits
- Price and marginal cost refer to the same product, output unit, market, and period.
- Marginal cost is supplied by the user and is not inferred from average cost or accounting expense.
- The result is a descriptive economic measure; interpretation depends on demand, market structure, estimation quality, and the context of the supplied inputs.
Calculator note
Source and methodology
Use the official WorldCalculate methodology policy for the source, formula, precision, and boundary standards behind this calculator.
Planning estimate, not financial, medical, legal, or professional advice. © WorldCalculate — reuse with attribution. Built and curated by Hassan ALRowaie.
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