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.
Economic profit is when revenue exceeds total cost of inputs. Normal profit, on the other hand, is net profit less costs.
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 the difference between reasonable profits and economic profits
There is no difference.
No difference.
What is difference between trust run and for-profit hospitals
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.
No difference. They mean the same thing.
No difference. They mean the same thing.
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.
There is not difference; they mean the same thing.
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.