Question

Pure (economic/supernormal) profit means ______.

Options

• Revenue just covers explicit cost

• Revenue just covers normal profit

• Extra profit over and above all costs including normal profit

• Loss made by the firm

Answer 1

Pure (economic/supernormal) profit means extra profit over and above all costs, including normal profit.

Explanation:

Pure profit is the excess of total revenue over total cost when total cost already includes normal profit.