Question

Normal profit________________.A. Covers the full opportunity cost of the resources used by the firm. B. Is an above-average rate of return. C. Is the accounting profit earned when economic profits are greater than zero. D. Is sufficient to induce entry into the industry.

Answer 1

The correct answer is letter "A": Covers the full opportunity cost of the resources used by the firm.

Step-by-step explanation:

Normal profit is an economic term that means zero economic profit. For economists, this usually happens since total revenue equals total cost. The latest include costs in both dimensions: explicit cost and implicit cost. Normal profit occurs when resources are being used in the most efficient way at their highest and best use.