WAEC Economics 2023 Objective — Question 20
Question 20 of 50 from the West African Examinations Council (WAEC) 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 perfectly elastic. C. price exceeds average total cost. D. expenditure on advertisement increases.
- A. marginal cost exceeds marginal revenue
- B. demand curve is perfectly elastic
- C. price exceeds average total costCorrect
- D. expenditure on advertisement increases
Explanation
When the price of a market exceeds its average cost, the firm enjoys abnormal profit for as long as that situation remains.
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