Question

Normal profit is defined as ______.

Options

• minimum payment which a producer must get in order to induce him to undertake the risk involved in production.

• profit which is low enough so that new firms do not want to enter the industry.

• both minimum payment which a producer must get in order to induce him to undertake the risk involved in production and profit which is low enough so that new firms do not want to enter the industry.

• None of these.

Answer 1

Normal profit is defined as minimum payment which a producer must get in order to induce him to undertake the risk involved in production and profit which is low enough so that new firms do not want to enter the industry.