Normal profit is defined as a(n):

Question

Quizplus · Accepted Answer

Normal profit is the minimum necessary profit needed to keep a firm in operation. It is considered a cost of doing business and is not the same as economic profit. Economic profit takes into account both explicit (direct) and implicit (indirect) costs and is what determines whether a business is truly profitable or not. Since normal profit is simply the amount needed to cover the costs of operating a business, it is considered a fixed cost and not a profit in the traditional sense. Therefore, choice D is the best answer.

Normal Profit Is Defined as A(n)