According to economic theory normal profit is O the average

According to economic theory, normal profit is: O the average profitability of an industry over the previous 5 years. O the return to the entrepreneur when economic profits are zero. O calculated by subtracting explicit costs from total revenue. O calculated by subtracting implicit costs from total revenue. 0 Type here to search

Solution

b. return to the entreprenuer when the economic profits is 0.

Economic profit is the profit earned over and above normal profit. Normal profit occurs when a firm utilizes all its resources efficiently and cannot put them to other better usage. It is the minimum profit level that a firm should earn in order to remain competitive in the market.

Normal Profit = Total revenue - Explicit Costs - Implicit Costs = 0

Economic Profit = Total revenue - Explicit Costs - Implicit Costs > 0

Please like my answer and give a thumbs up.