Could you please explain this statement to me? I am confused. By defining the concept of the
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Question:
Could you please explain this statement to me? I am confused.
"By defining the concept of the percentage markup of prices over marginal cost as
(P -MC/P) = - 1/D, where D refers to the price elasticity of demand of the monopoly firm,one can use this concept to determine the market power of this profit maximizing monopoly firm."
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