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29b. Monopoly on the Elastic Portion of Demand

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Uploaded on Mar 27, 2010

In this video, I use calculus to show how a monopoly's profit maximizing decision relates to the elasticity of demand. I show the following facts about monopolies in this video:

1. Marginal Revenue = Marginal Cost is the profit maximizing condition.
2. MR = P(1+1/e) where e is the elasticity of demand.
3. A monopolist prices on the elastic portion of the demand curve.

For a list of videos and links to these videos (organized by topic), check out the Intromediate Microeconomics video web page:

http://blog.thisyoungeconomist.com/p/...

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