RPG Insanity

So I just attempted the monster arena battle in that one town & I made it all the way to the Evil Demon before my characters got killed.

Out of curiosity, what prize would I get for beating the evil demon?

And is the evil demon the final monster in the monster arena battle?

First 2 arena ends after certain wave. Last one is unlimited until you get beaten.

Money, item that add weapon exp and I think some consumable. These are not helping much.

Iirc that is the last wave of first arena. If you really want to beat it now you can grind level on the eastern area of that town (walk until you hit dead end).