In which of the following markets does a firm have power to make super normal profits both in the short run and long run?
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Correct Answer: Option A
Explanation:
If a firm makes more than normal profit it is called super-normal profit.
The monopoly is able to make supernormal profits in the short run and long run because the price (AR) is greater than AC.
If a firm makes more than normal profit it is called super-normal profit.
The monopoly is able to make supernormal profits in the short run and long run because the price (AR) is greater than AC.