ECONOMICS
PROFIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Detailed explanation-1: -In markets which are perfectly competitive, the profit available to a single firm in the long run is called normal profit. This exists when total revenue, TR, equals total cost, TC.
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: -Profit is defined as the difference of total revenue (TR) over total cost (TC) of the firm. So profit = TR – TC.
Detailed explanation-4: -Normal profit is Part of total cost. Normal profit is an economic term that describes when a company’s total revenues are equal to its total costs in a perfectly competitive market.