Consider a monopoly with inverse demand given by P(q) = a - bq and cost function c(q) = cq, where a > c > 0 and b > 0.

1. What is the Lerner index?

A. (a-c)/2

B. (a+c)/2

C. (a-c)/(a+c)

D. (a+c)/(a-c)

1. What is the elasticity of demand in absolute value?

A. (a-c)/2

B. (a+c)/2

C. (a-c)/(a+c)

D. (a+c)/(a-c)