What term describes a company earning profits beyond its normal profit level?

Multiple choice question for Supply and Demand. Select an option, then review the explanation below.

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Profit calculated after considering opportunity costsRevenue minus explicit costsMinimum profit required to keep resources employedExcess profit over and above normal profitNone of the above

Explanation

Supernormal profit refers to the earnings exceeding the normal profit, which is the minimum amount needed to keep a firm operating. Economic profit accounts for total opportunity costs, accounting profit considers only explicit costs, and normal profit is the baseline profit level.

Practice related questions from the same subject.

1.What is the typical shape of a demand curve?
2.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?
3.Marginal revenue refers to the ________ resulting from producing an additional ________ of output.
4.What are firms generally assumed to do with their costs and profits?
5.What term describes the added satisfaction gained from consuming an additional unit of a product?

What term describes a company earning profits beyond its normal profit level?

Explanation

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