Perfect Competition, Imperfect Competition, Markets

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4 Terms

1
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Normal Profit ?

Occurs when TC=TR

This is where enough revenue if generated to cover the monetary costs of production and the opportunity cost of the factors of production that have not yet been paid for. It’s the amount require

2
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What is profit to an entrepreneur?

A reward - for their role in combining factors of production, spotting gaps in the market and taking risks. Entrepreneurs play a key role in the economy by innovating and creating dynamic efficiency and this would not be possible without profits acting as an incentive.

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Functions of Profit ?

  1. Incentive to reduce/eliminate waste. Waste of 

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