Lerner index

Index named after the economist, Abba Lerner, that describes a monopoly's pricing power. (price - Marginal Cost)/ price

the greater the difference between price and marginal cost the larger the Lerner Index and the greater power the monopoly has to set price.

It can also be described as the negative inverse of demand elasticity.

(p-mc)/p = -1/e where "e" is demand elasticity

The Lerner Index must be between 0 and 1 for profit-maximizing monopolies.