Profit Flashcards
1
Q
Equation to calculate profit
A
Profit= TR-TC
2
Q
When is there normal profit
A
When profit equals zero and the firm covers its opportunity cost
When TR=TC
3
Q
What happens when making less than normal profit ?
A
Firm would have to leave the market as they cant cover their opportunity cost
4
Q
When is a firm making SNP
A
When TR>TC
