Economic profit and economic loss, Microeconomics

Economic profit and Economic loss:

Economic profit is the excess if total revenue over total cost when the latter includes both explicit and implicit costs. It is the type of profit when made by firms in an industry attracts new firms into the industry when no barriers to entry exist while existing firms also expand their production.It is also called pure or supernormal profit.

Economic Loss is the excess of total cost (both implicit and explicit) over total revenue. This type of loss when made by firms in an industry would discourage firms which are unable to cover their variable costs to exit the industry while those who are able to cover their variable costs to exit the industry while those who are able to cover their variable costs to exit the industry while those who are able to cover their variable costs will stay in the short run.

Posted Date: 1/2/2013 11:52:27 PM | Location : United States







Related Discussions:- Economic profit and economic loss, Assignment Help, Ask Question on Economic profit and economic loss, Get Answer, Expert's Help, Economic profit and economic loss Discussions

Write discussion on Economic profit and economic loss
Your posts are moderated
Related Questions
What is use of analytical tools in the modern economics? Analytical Tools: Modern economics also gives different powerful analytical tools which are usually specified by geo

Monopoly is that form of market where there is only one firm producing a particular product. Being the sole supplier, the monopoly firm has the power to control prices and output t

Ask qIf the supply and demand curves for labor are represented by the following equations: Wd= -- (1/100)Ld + 30 Ws= (1/200)Ls Ws=Wd Ld=Ld a. Graph the results and show the equili

Households: The fundamental unit of individual economic behaviour. Households offer labour supply to labour market, make consumer purchases,earn income (from employment and other s

wHEN WAGE IS $6.05, HOW MANY HOURS ARE WORKED A WEEK?

Mrs Holt, 85 years old, has been admitted to acute care following a fall resulting in a fractured femur. She is a widow and lives alone with her three cats for company. a) What

Suppose that there is a credit market imperfection because of limited commitment. As in the setup with collateralized wealth, each consumer has a component of wealth which has valu

Sample Survey and Test Marketing: Under this method some representative households are selected on random basis as samples and their opinion is taken as the generalized opinio

could a nations production possibilities curve ever shift inward