* Normal profit occurs when the extra revenue left, on top of whats needed to cover the firms money costs, is equal to the opportunity costs of the factors of production that arent paid for. If the extra revenue is less than those opportunity costs, then the firm would have been better off putting the factors of production to a different use. In other words, normal profit is the minimum level of profit needed to keep resources in their current use in the long run.

PROFIT

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

* Normal profit occurs when the extra revenue left, on top of what’s needed to cover the firm’s money costs, is equal to the opportunity costs of the factors of production that aren’t paid for. If the extra revenue is less than those opportunity costs, then the firm would have been better off putting the factors of production to a different use. In other words, normal profit is the minimum level of profit needed to keep resources in their current use in the long run.

A	Yes, I understand this from the notes
B	No, I don’t understand this from the notes
C	No, I don’t understand this, as I have not read the notes
D	None of the above

Explanation:

Detailed explanation-1: -Normal profit is an economic term that refers to a situation where the total revenues of a company are equal to the total costs in a perfectly competitive market. It means that the company makes sufficient revenues to cover the overall cost of production and remain competitive in its respective industry.

Detailed explanation-2: -Normal profit is a profit metric that takes into consideration both explicit and implicit costs. It may be viewed in conjunction with economic profit. Normal profit occurs when the difference between a company’s total revenue and combined explicit and implicit costs are equal to zero.

Detailed explanation-3: -Super profit is the excess of average profits over normal profits. It is a way of determining the extra profits that are earned by the business.

Detailed explanation-4: -A normal profit occurs when economic profit is zero. Economic profit is total revenue minus opportunity cost which means a normal profit is when this equals zero.

There is 1 question to complete.

ECONOMICS (CBSE/UGC NET)

ECONOMICS

PROFIT