Explain the difference between economic and normal profits
What will be an ideal response?
Normal profit is the amount of profit necessary to insure that a firm continues to operate in the long run, and it is based on the profit that could be earned in its next best alternative activity. It is equal to the sum of its accounting cost and opportunity cost. Economic profit is the amount of profit above normal profit: profit in excess of what could be earned in its next best alternative activity.
Economics
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Imposing an employment tax leads to
A) a decreased supply of labor. B) more employment. C) decreased potential output in the economy. D) greater demand for labor.
Economics
Discounting is converting a future amount of money to a present value
Indicate whether the statement is true or false
Economics