3.3.4: Profits

Question 1

What is profit?

Answer 1

• The difference between Total Revenue- Total Costs.

Question 2

What are the three types of profit?

Answer 2

• Normal Profit
• Supernormal Profit
• Subnormal Profit

Question 3

What is normal profit?

Answer 3

• Normal profit is the minimum reward required to keep entrepreneurs to supply their enterprise.
• It covers the opportunity cost of investing funds into the firm and not elsewhere.