A monopolist may enjoy abnormal profit only if its

A.

Marginal cost exceeds marginal revenue

B.

Demand curve is perfectly elastic

C.

Expenditure on advertisement increases

D.

Price exceeds average total cost

Correct answer is D

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.