Market performance refers to the final economic achievements in terms of price, output, cost, profit, product quality and variety, and technological progress formed by certain market behaviors in a certain market structure. Market performance reflects the effect of market operation under specific market structure and market behavior conditions. [1]
Measures
Indicators for measuring market performance - profit margin, Lerner index and Bain index
（1） profit margin -- Common indicators R=（π-T）/ E
Where, R - post tax return on capital, π - pre tax profit, T - total tax, E - self owned capital.
Whether an average profit rate is formed among industries is a measure of society Resource allocation efficiency Whether it reaches the most basic quantitative index The value of Lerner index varies from 0 to 1
Under the condition of perfect competition, Lerner index=0;
Under monopoly conditions, the Lerner index will be larger, but it will not exceed 1;
The larger the Lerner index, the lower the degree of market competition.
（3） Bain Index Bain divides profits into accounting profits and economic profits, Accounting profit=total income - total cost of the current period - depreciation
Economic profit=accounting profit - normal Return on investment × Total investment Bain index=economic profit/total investment
The Bain index represents the industry's excess profit margin. If excess profits (or economic profits) continue to exist in the market, it generally indicates that there is monopoly power in the market, and the higher the excess profits, the stronger the monopoly power.
(4) Tobin Q value: the ratio of the market value of an enterprise to the replacement cost of its assets.
The greater the Q value, the greater the monopoly profit that the enterprise can obtain, the greater the social welfare loss, and the lower the market economic performance.
