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2 cards from this section. Quick, good the night before a test.
What is normal profit?
Think about what a firm needs to cover to stay in business.
What happens if a firm doesn't earn normal profits?
Consider the opportunity cost of being in business.
What is normal profit?
Consider what a firm needs to continue operations.
True or False: The break-even point is where a firm makes a loss.
Think about how revenue and costs relate at this point.
If a firm has total costs of Rs 200 and requires a normal profit of Rs 50, what must be its total revenue to break-even?
Consider the relationship between total revenue, total costs, and normal profit.
A firm generates Rs 600 in revenue but has total costs of Rs 650. What type of profit or loss does this represent?
Think about how profits are calculated.
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