A firm\'s \"normal profit\" is best characterized by the ______ _____average of
ID: 1218060 • Letter: A
Question
A firm's "normal profit" is best characterized by the ______
_____average of a firm's profits over the past five years.
_____amount of profit necessary to keep the price of a firm's stock from changing.
_____amount of profit a firm could earn in its next best alternative activity.
_____the average amount of profit earned in the firm's industry.
_____average of a firm's profits over the past five years.
_____amount of profit necessary to keep the price of a firm's stock from changing.
_____amount of profit a firm could earn in its next best alternative activity.
_____the average amount of profit earned in the firm's industry.
Explanation / Answer
A firm's "normal profit" is best characterized by the amount of profit a firm could earn in its next best alternative activity.
Normal profit is an economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero. Simply put, normal profit is the minimum level of profit needed for a company to remain competitive in the market.
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