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3.3.4 Normal profits, supernormal profits and losses

Why is normal profit included within a firm's costs?

A

It is the entrepreneur's sunk cost - the expenditure that cannot be recovered if the firm leaves the market.

B

It is the entrepreneur's variable cost - the payment that rises whenever the firm's level of output increases.

C

It is the entrepreneur's fixed cost - the payment that remains unchanged as the firm's output varies.

D

It is the entrepreneur's opportunity cost - the reward available in the next best use of resources.

3.3.4 Normal profits, supernormal profits and losses Flashcards

  1. A Level
  2. /Economics
  3. /3.3.4 Normal profits, supernormal profits and losses

Flashcards for Edexcel A A Level Economics 3.3.4 Normal profits, supernormal profits and losses, covering the key terms, economic models and case studies you need to recall for Paper 1, Paper 2 and Paper 3. 23 cards, matched to the Edexcel A A Level Economics (9EC0) specification.