economic profit
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Last updated 10:14 AM on 12/1/22
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6 Terms
1
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economic profit formula
TR- TC: TR - explicit costs - implicit costs (opportunity cost)
2
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accounting profit
TR- TC: TR - explicit costs
3
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normal profit
minimum level of profit requires to keep FoP in their current use: AR = AC
4
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supernormal profit
AR > AC
5
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subnormal proft
AR < AC
6
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shutdown condition
if AR = AVC, firm should consider shutting down and if AR < AVC, definitely shut down
Note 
Flashcards (36)