McqMate
| Q. |
Economic profit or normal profit is the same as - |
| A. | optimum profit |
| B. | accounting profile |
| C. | maximum profit |
| D. | net profit |
| Answer» D. net profit | |
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Explanation: Normal profit or economic profit is an economic condition occurring when the difference between a firm's total revenue and total cost is equal to zero. Simply put, normal profit is the minimum level of profit needed for a company to remain competitive in the market. In a sense, normal profit is the same as net profit which is calculated by subtracting a company's total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time. Accounting profit occurs when revenues are greater than costs, and not equal, as in the case of normal profit. |
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