Perfect competition:  Normal profits
Channel: Werner Lost
Date: 2012-01-01

Normal profit is equal to the best return that the firm's self-owned, self-employed
resources could earn elsewhere. It can be regarded as the minimum payment required by
the owner of the firm to stay in the particular business. Normal profit includes the cost of the
owner's time and capital and is included in the firm's economic costs. If an economist
therefore talks about the cost of doing business, he or she would include the normal profits
that must be paid to the owners to keep them in the particular business.