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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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