Super-normal Profit

Super-normal Profit:

Whenever the average revenue of the firm is more than its average cost, the firm is earning super-normal gain.

269_super normal profit.jpg

In figure above, output is evaluated all along the x-axis and price, revenue and cost all along the y-axis. OP is the prevailing cost in the market. PL is the demand curve or average and also the marginal revenue curve. SMC and SAC are the short run average and marginal cost curves. The firm is in equilibrium at point ‘E’; where MR = MC and MC curve cuts MR curve from underneath at the point of equilibrium. Hence the firm will be generating OM level of output. At OM level of output ME is AR and MF is the average cost. Profit per unit of output is EF (i.e., the difference among ME and MF). The net profits earned by the firm will be equivalent to EF (i.e., profit per unit) multiplied by OM or HF (i.e., net output). Therefore the net profits will be equivalent to the region HFEP. The HFEP is a supernormal profits received by the firm.


Latest technology based Economics Online Tutoring Assistance

Tutors, at the, take pledge to provide full satisfaction and assurance in Perfect Competition help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Perfect Competition, project ideas and tutorials. We provide email based Perfect Competition help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Perfect Competition. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Economics Homework help and assignment help services. They use their experience, as they have solved thousands of Economics assignments, which may help you to solve your complex issues of Perfect Competition. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.

2015 ┬ęTutorsGlobe All rights reserved. TutorsGlobe Rated 4.8/5 based on 34139 reviews.