The three major sources of economic profit are

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Economic profit is earned when a firm generates revenue that exceeds its total costs, including both explicit and implicit costs. Risk-bearing refers to the willingness of an entrepreneur to undertake financial risks associated with starting and running a business. Innovation involves the development of new products, processes, or business models that enable a firm to differentiate itself from competitors and capture a greater share of the market. Exercise of monopoly power occurs when a firm has the ability to restrict output and raise prices, leading to higher profits. These three factors are widely considered to be the primary sources of economic profit.

The Three Major Sources of Economic Profit Are