5. Excess profit is earned when
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Supernormal profit is also called economic profit, and abnormal profit, and is earned when total revenue is greater than the total costs. ... By firms in perfectly competitive markets in the short run, before new entrants have eroded their profits down to a normal level.
The excess profit a company produces over the minimum return required to stay in operation is referred to as supernormal profit.
A normal (market equilibrium) return on capital is defined as "profit of a firm above and over what gives its shareholders with a regular (market equilibrium) return on capital." In economics, abnormal profit is also known as excess profit, supernormal profit, or pure profit. The future costs of the founder's resources is defined as normal profit (return).
Excess profits taxes is a surcharge paid on business earnings or income that exceeds a certain profit rate. Excess profits tax is essentially a marginal tax rate increase on earnings in higher tax levels.