The Economist (reference below) defines normal profit as the opportunity cost of the entrepreneur, the amount of profit just sufficient to keep the firm in business, and adds:
“If profit is any lower than that, then enterprise would be better off engaged in some alternative economic activity. Excess profit, also known as super-normal profit, is profit above normal profit and is usually evidence that the firm enjoys some market power that allows it to be more profitable than it would be in a market with perfect competition.”
Atlas topic, subject, and course
The Economist, Profit, Economics A-Z, at http://www.economist.com/economics-a-to-z/p#node-21529475, accessed 7 May 2016.
Page created by: Ian Clark, last modified 7 May 2016.