Justify the statement, “In economics, normal profits are always a p

1.	Justify the statement, “In economics, normal profits are always a p
Answer» The given statement is correct. Total cost refers to the sum of expenses spent by a firm on various factors of production viz. land, labour, capital and enterprise. Rent, wages and interest are the payments for land, labour and capital. Normal profit is the maximum reward that is just sufficient to keep the entrepreneur supplying his factor services. Normal profit induces an entrepreneur to take risk of production and selling. Hence, normal profit is a part of total cost.

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Justify the statement, “In economics, normal profits are always a p

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