Normal profit is considered the minimum amount of earnings needed to keep an entrepreneur engaged in a particular business activity. It represents the opportunity cost of the entrepreneur's talents and is factored into the firm's costs as an implicit cost.

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A Normal Profit Is

Question 254

Multiple Choice

A normal profit is

A) the average profitability of a firm over one complete business cycle.
B) calculated by subtracting explicit costs from total revenue.
C) the "price" required to retain entrepreneurial talent in some particular line of production.
D) the amount by which total revenue exceeds total operating costs.

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