Normal profit is:
A) not a cost of production.
B) the profit necessary to keep a business in operation.
C) the average profit for all businesses in the United States.
D) the amount over and above what an entrepreneur could earn in his or her next best alternative.

Question

Quizplus · Accepted Answer

Normal profit is considered the minimum amount of profit needed for a company to remain competitive in the market. It is essentially the cost of keeping an entrepreneur in a current business, as opposed to them moving their capital and efforts to the next best alternative. This concept is crucial for understanding the break-even point of a business.

Normal Profit Is