Normal profit is

Question

Normal profit is

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Normal profit is the return to entrepreneurship, which is the minimum level of profit necessary to keep an entrepreneur engaged in a particular business or industry. It is the amount of profit needed to cover both explicit costs (such as wages, rent, and materials) and implicit costs (such as the opportunity cost of the entrepreneur's time and skills). Normal profit is not the same as economic profit (A), which is total revenue minus both explicit and implicit costs, and is the measure of a firm's true profitability. Normal profit is also not the same as total revenue minus the total opportunity cost of production (C), since this would result in zero profit. Normal profit does not depend on the level of profit at which total revenue is maximized (D) or on any particular part of the firm's total revenue (E).

Normal Profit Is