Normal profit flashcard sets

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normal profit definitions
# Definition Sets
1the minimum acceptable profit for owners of the business3 sets
2the opportunity cost of the resources supplied by the firm's owners; normal profit= accounting profit - economic profit3 sets
3the minimum acceptable profit for keeping the firm in business2 sets
4the accounting profit that corresponds to a zero economic profit2 sets
5the opportunity cost of the resources supplied by the firm's owners2 sets
6where total economic costs equal total revenue, also break even point2 sets
7the cost of doing business1 set
8the return to entrepreneurship normal profit is a part of the firms opportunity cost because it is not the cost of not running another firm1 set
9the amount the owners of business would have received in the next-best alternative1 set
10the payment made by a firm to obtain and retain entrepreneurial ability; minimum income entrepreneurial ability must recieve to induce it to perform functions for a firm.1 set
11opportunity cost of owners' entrepreneuship expertise. it represents what owners could have earned if they used their organizational decision-making and other entrepreeurial skills is another activity such as running another business.1 set
12profit necessary to recover implicit costs and keep a business in operation considered to be an economic costs of production1 set
13the payment made by a firm to maintain business. portion of accounting profit that covers implicit costs.1 set
14the payment made by a firm to obtain and retain entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for the firm.1 set
15cost of entrepreneur contributions1 set
16payment made by a firm to obtain and retain entrepreneurial ability; meets the implicit and explicit costs of the firm1 set
17enough to keep in business1 set
18a return to entrepreneurs which is just sufficient to keep them in their present activity. all costs including opportunity cost of resources used are covered. ar = ac1 set
19rate of earnings on invested capital1 set
20the amount the owners of businesses would have received in the next best alternative1 set
21revenue covers implicit and explicit costs1 set
22occurs when ar is equal ac so owners receiving just enough to keep them in this industry as they can earn no more in the activity that is the next best use of their resources1 set
23opportunity cost of the resources supplied by the firm's owners; normal profit=accounting profit-economic profit.1 set
24the minimum accounting profit necessary to keep the firm operating in it current undertaking (is an implicit cost and is included as a cost when calculating profit)1 set
25the level of profit that business owners could get in their next best alternative investment1 set
26cost of doing business, the opportunity cost of the resources supplied by the firm's owners; normal profit= accounting profit - economic profit1 set
27the amount necessary for the firm to be willing to keep the resources deployed in the firm, it is also where the firm's economic profit equals zero1 set
28minimum acceptable profit for owners1 set
29accounting profit - economic profit1 set
30enough profit to keep the business going (not too much or too little)1 set
31entrepreneurial ability1 set
32opportunity cost of resources supplied by owners of the firm--includes the opportunity cost of their time1 set
33the payment made by a firm to obtain and retain entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm1 set
34payment for (cost of) entrepreneurs contributions1 set
35profit that the firm could make by using its resources in their next best use (opportunity cost)1 set
36the opportunity cost of the resources supplied by the firm's owners; accountin profit-economic profit1 set
37the accounting profit earned when all resources earn their opportunity cost1 set
38the cost of entrepreneurial talent; must make this much in economic profit to stay in the business; the cost of doing business1 set
39opportunity cost of labour and capital1 set
40p = lrmc1 set