Asked by Rachelle Abalos on Apr 29, 2024
Verified
Normal profit is considered an economic cost.
Normal Profit
The profit level that allows a business to cover its costs, including the opportunity cost of capital, without making an economic profit.
Economic Cost
The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).
- Comprehend the concept of normal profit and economic cost.
Verified Answer
JF
jailson fernandesApr 29, 2024
Final Answer :
True
Explanation :
Normal profit is considered an economic cost because it represents the minimum amount of profit needed for a company to remain competitive in the market, effectively the opportunity cost of capital.
Learning Objectives
- Comprehend the concept of normal profit and economic cost.