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That's only for economic profit. Normal profit remains even when economic profit is driven to zero: https://www.investopedia.com/terms/n/normal_profit.asp http
by ETH_start 3y ago
That's only for economic profit. Normal profit remains even when economic profit is driven to zero:
https://www.investopedia.com/terms/n/normal_profit.asp https://www.investopedia.com/terms/n/normal_profit.asp
"Economic profit is the profit an entity achieves after accounting for both explicit and implicit costs.
Economic Profit = Revenues - Explicit costs – Implicit costs
Normal profit occurs when economic profit is zero or alternatively when revenues equal explicit and implicit costs.
Total Revenue - Explicit Cost - Implicit Cost = 0
or
Total Revenue = Explicit + Implicit Costs"
- Clent 3y agoIn a perfect system, I wouldn't pay a penny more than your total cost. Capitalist extraction can only occur because we pretend it's not an exploitation of unequal knowledge.
- ETH_start 3y agoNo, profit is just and economically rational compensation to the investor. Without it, the opportunity cost and risk of saving and investing, respectively, is not compensated for.