A normal rate of profit ?
Correct answer: B. is the rate that is just sufficient to keep owners or investors satisfied.
- A. Is the rate of return on investments over the interest rate on risk-free government bonds.
- B. is the rate that is just sufficient to keep owners or investors satisfied.
- C. is the difference between total revenue and total costs
- D. is zero in a perfectly competitive industry.
Explanation
Normal profit is the minimum return required to keep owners and investors in the business, including their opportunity costs. It is therefore an economic cost rather than an excess profit.
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