normal profit are a part of total cost .How?

Dear Student,

Normal profits refer to the level where the firm's Total Revenue (TR) is exactly equal to its Total Cost. Now, the Total Cost of a firm includes explicit cost as well as implicit cost.This means, when a firm's TR=TC, it is covering its explicit as well as implicit cost. Now, if the firm is covering its implicit cost, then it means that the firm has some incentive to continue production, which is generally referred as normal profit.

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