Normal profits are those that result in rates of return that are just sufficient to attract new capital in financial markets.

Question

Quizplus · Accepted Answer

Normal profits are the minimum level of profits required to keep a company in business and attract new investment. This is because if a company is not earning at least the normal rate of return, investors will choose to invest their funds elsewhere. Therefore, normal profits are necessary for a company to remain competitive and sustain its operations.

Normal Profits Are Those That Result in Rates of Return