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Economic Profit vs. Normal profit

what the heck is the difference?

normal profit - the profit you would earn in a perfectly competitive environment. normal profit includes all explicit and implicit opportunity costs

economic profit - the difference between the revenue received and all costs associated with the production of that good, including opportunity costs. normal profit is not a component of economic profit.



Edited 1 time(s). Last edit at Sunday, November 28, 2010 at 01:31AM by BayStreet.

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Thank you!

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