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Economic Definition of marginal revenue and demand elasticity monopoly. Defined.

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Term marginal revenue and demand elasticity monopoly Definition: The price elasticity of the demand curve facing a monopoly firm determines if the marginal revenue received by the monopoly is positive (elastic demand) or negative (inelastic demand). This relationship is important for the profit-maximizing production decision that involves equality between marginal revenue and marginal cost. It implies that a monopoly can only maximize profit in the elastic range of the demand curve.

 

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