JAMB Economics 2011 Paper

Concept:A monopolist earns economic profit when price exceeds average total cost; profit is zero at the break-even point where price equals average cost.Explanation:Total profit is given by:$$\text{Profit} = (P - AC) \times Q$$Here, $P$ is price, $AC$ is average cost, and $Q$ is quantity sold.To eliminate profit, set $(P - AC) \times Q = 0$.Since $Q > 0$, this requires $P - AC = 0$.Thus, profit is eliminated when price equals average cost:$$P = AC$$Other options do not guarantee zero profit because marginal cost, average variable cost, or average fixed cost do not reflect total cost per unit.Answer:C. AC