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A monopolist faces demand q=D(p), with inverse demand function p=P(q). Its cost of producing q units is C(q). Prove that at the monopoly price p
A monopolist faces demand q=D(p), with inverse demand function p=P(q). Its cost of producing q units is C(q).
Prove that at the monopoly price pm, it holds that
(pm-C')/pm = -1/, with the demand elasticity at the monopoly price pm.
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