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- Subject
- Monopolyeconomics-mcqs › monopoly
- Published
- 30 May 2019
- Last updated
- 28 May 2026
Under what condition does a monopoly earn abnormal profits?
Multiple choice question for Monopoly. Select an option, then review the explanation below.
Explanation
A monopoly achieves abnormal profits when the price it sets is higher than the marginal cost of production. This allows the firm to earn profits above the normal level. Options B, C, and D describe scenarios that do not result in abnormal profits.
More Monopoly MCQs
Practice related questions from the same subject.
- 1.Which option best describes the concept of price discrimination?
- 2.In contrast to a perfectly competitive market, what is a monopolist more inclined to do?
- 3.In a pure monopoly market, how does the price compare to the marginal revenue?
- 4.What action should a monopolist take when marginal revenue is greater than marginal cost?
- 5.What is the likely impact on production costs if a natural monopoly is divided into several smaller companies by regulators?