If amount of super profit is negative what does it indicates?
Dear Student
We know that,
Super profit = Actual Average Profit - Normal profits.
Super profit are negative means Normal profit are more then Average profits,
In other words we can say that negative super profits indicated that company is actually unable to generate amount equal to normal profits each year and hence its Actual average profits are less then computed normal profit.
Regards
We know that,
Super profit = Actual Average Profit - Normal profits.
Super profit are negative means Normal profit are more then Average profits,
In other words we can say that negative super profits indicated that company is actually unable to generate amount equal to normal profits each year and hence its Actual average profits are less then computed normal profit.
Regards