标题: normal profit, economic profit confusion [打印本页] 作者: suyash1989 时间: 2013-4-10 18:38 标题: normal profit, economic profit confusion
Hello everybody
I am reading micro econ analysis, perfect competition part and get some confuses of terminologies “normal profit” and “economic profit”. It says “economic profit equals total revenues less the opportunity cost of production, which includes the cost of a normal return to all factors of production, including invested capital” is very clear to understand.
However, in the context of distinguishing between the firm’s and the industry’s shortrun curve it follows some explain as following:
* Price takers will produce where P=MC=MR=ATC (in the short term) to maximize profit
* Firm will continue operating at the price P1
