Question 5 in this why super profit not added
Ques5 Calculate economic Cost, explicit cost & implicit cost
Estimated su er norma rofi Ques 5 in this why super profit not added
Dear Student,
Cost, in economics, is defined as the sum of explicit and implicit costs, and includes normal profits, which are the minimum profits that the entrepreneur needs to earn in order to stay in business. Super profits are that part of profits that are earned over and above these normal profits, and are not a part of the economic cost. That is why, super profit is not added.
Cost, in economics, is defined as the sum of explicit and implicit costs, and includes normal profits, which are the minimum profits that the entrepreneur needs to earn in order to stay in business. Super profits are that part of profits that are earned over and above these normal profits, and are not a part of the economic cost. That is why, super profit is not added.