GCE Economics 2023 Objective — Question 20
Question 20 of 50 from the General Certificate of Education (GCE) Economics 2023 Objective paper, with the correct answer and a full explanation.
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A monopolist may enjoy abnormal profit only if its
- A. marginal cost exceeds marginal revenue
- B. demand curve is perfect elastic
- C. price exceeds average total costCorrect
- D. expenditure on advertisement increases
Explanation
A monopolist earns abnormal (supernormal) profit in the short run when price exceeds average total cost (P > ATC).
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