ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Normal profit is the minimum compensation that justifies a company, and it occurs when the total revenues equal the total costs. It includes both the implicit costs and explicit costs, and the opportunity costs of foregoing the next best alternative.

Detailed explanation-3: -Formula for normal profit Economic profit = total revenue-(explicit costs + opportunity costs) = 0A business determines whether it’s in a state of normal profit by using the economic profit formula. If the economic formula equals zero, the company has a normal profit.

Detailed explanation-4: -Economic profit is equal to the difference between total revenues and economic costs.

Detailed explanation-5: -Profits. Accounting profit is defined as total revenue minus explicit costs. Economic profit is defined as total revenue minus explicit and implicit costs. Explicit costs are costs that must explicitly be paid–as opposed to implicit costs, such as opportunity costs.