In which of the following markets does a firm have power to make super normal profits both in the short run and long run?

  • A Monopoly
  • B Duopoly
  • C Oligopoly
  • D Monopsony
waec 2011economics

The correct answer is A. Monopoly

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.

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