Asked by
Mario Espana
on Nov 04, 2024
Verified
If a firm makes an economic profit, it is making at least a normal rate of return.
Economic Profit
The difference between total revenues and total economic costs (including both explicit and implicit costs), reflecting the additional income generated over and above the opportunity costs.
Normal Rate
A standard or typical rate used as a benchmark or point of reference, often in contexts like interest rates or economic growth rates.
- Comprehend the principle of economic profit and its distinction from accounting profit.
- Understand the function and computation of the standard rate of return within corporate economics.
Verified Answer
NS
Learning Objectives
- Comprehend the principle of economic profit and its distinction from accounting profit.
- Understand the function and computation of the standard rate of return within corporate economics.