The Lerner Index, which measures a monopolist’s pricing power, is defined as:
L = (P - MC) / P = 1 / |Ed|
Where:
For a monopolist to maximize profit, the absolute value of demand elasticity must be greater than one (|Ed| > 1), ensuring P > MC and a positive Lerner Index.
"Development of Railways during British rule encouraged colonial exploitation of the Indian resources."
Justify the given statement with valid arguments.