This means that their revenue curves will also be downward sloping. The marginal revenue curve will be twice as steep as the average revenue curve and at the point it intersectes the axis, the price elasticity on the demand curve will be equal to one. The revenue curves are shown in the diagram below. This is the level of profit that is just enough to persuade the firm to stay in the industry in the long run, but not high enough to attract new firms. If less than normal profits are being made in the long run then firms will leave the industry.
Normal profit is treated as a cost of production and included in the average cost curve.
This is any profit above normal profits. New firms will be attracted into the industry in the long run by the presence of supernormal profit. Also known as economic profit or abnormal profit.