WAEC - Economics (2023 - No. 4)
A monopolist may enjoy abnormal profit only if its
marginal cost exceeds marginal revenue
demand curve is perfectly elastic
expenditure on advertisement increases
price exceeds average total cost
Explanation
A monopolist may enjoy abnormal profit only if its price exceeds average total cost. This is because a monopolist is the only producer in the market, and they can therefore set the price of their product. If the price exceeds average total cost, the monopolist will be making a profit.
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