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Price–Cost Lerner Index Calculator

Measure the share of price above marginal cost.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Subtract marginal cost from price and divide by price. A price of 100 with marginal cost of 70 gives a Lerner index of 0.3.

Lerner index = (price − marginal cost) ÷ price

Worked example

Enter these known values and leave the other values blank.

Price
100 USD
Marginal cost
70 USD
Lerner index
0.3

Assumptions and limitations

  • Use values from a consistent period, scope and currency. The stated formula defines this simplified model; the explanation describes quantities it leaves out.

Common questions

Does this use average cost?

The formula uses marginal cost. Substituting average cost changes the measure and can make comparisons misleading.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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