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What is the Difference between Normal profit and Economic Profit?
Wiki User
∙ 14y ago
In economics, normal profit is often called the break-even point. It is the level of profit where all of the costs of your business, including the salary of the CEO, are covered. When a firm has normal profit but not economic profit, the total revenue of the firm equals the total cost of the firm. However, if a firm has economic profit, total revenue is higher than total cost.
Wiki User
∙ 14y ago
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Differentiate between normal profit and economic profit?
Economic profit is when revenue exceeds total cost of inputs. Normal profit, on the other hand, is net profit less costs.
How is the concept of a normal return on investment related to the distinction between business and economic profit?
Economic profit is the profit made on an investment of some sort in which inflation and other economic factors have been considered. Normal return on investment is just the net profit made in the investment (simple subtraction).
What is a reasonable profit margin?
what is the difference between reasonable profits and economic profits
What is difference between non profit and not for profit?
There is no difference.
Difference between not for profit and non profit?
No difference.
What is the difference between non profit hospitals and for profit hospitals?
What is difference between trust run and for-profit hospitals
Is economic profit a cost of production?
Economic profits are not costs of production since the entrepreneur does not require the gaining of an economic profit to keep the firm operating. In economics, costs are whatever is required to keep a firm operating.
What is the difference between not-profit and non-profit?
No difference. They mean the same thing.
What is the difference between not-for-profit and non-profit?
No difference. They mean the same thing.
What is the difference between non-profit and not-for-profit?
There is not difference; they mean the same thing.
Difference between accounting profit and economist's profit?
The accounting profit is the difference between total revenue and total cost excluding the economic cost (opportunity cost) of owner-supplied resources such as time and capital. At the other hand, In the economic cost, we include the opportunity cost in our calculations. · When total revenue exceeds both explicit and implicit costs, the firm earns economic profit. · Economic profit is smaller than accounting profit Another answer culed be: Economic Profit is slightly different than accounting profit, which merely the firm's total revenues minus its total costs. Economic profit is defined as total revenues minus total operating costs minus opportunity cost. Opportunity cost is defined as the cost of the profits you forgo by not doing another activity. For example the opportunity costs of opening a lemonade stand is equal to the difference between the accounting profits of the lemonade stand minus the accounting profits of a more profitable hot dog stand.
How does one calculate the gross profit?
Gross profit is a pretty simple economic term. Simply, it is the difference between the total amount of sales minus the cost of the goods being sold.
