Definition
- Supernormal profit
- Supernormal profit is any profit above normal profit, where total revenue exceeds total cost including both explicit and implicit costs.
- Not to be confused with: Normal profit
- Normal profit is the minimum profit an owner must expect to earn to keep their resources in the business, and economists count it as a cost.
Test yourself
What is the difference between supernormal profit and normal profit?
Normal profit is the minimum that keeps the owner in the business and is counted as a cost; supernormal profit is anything above it.