In page navigation

Normal profit

Updated: Aug 20, 2021

The level of profit equal to the opportunity cost of entrepreneurial effort. Normal profit is regarded as the fair reward for the effort the entrepreneur puts into running a firm and the risk that they take on. Levels of profitability higher than this tend to stimulate entry to an industry, and levels of profits lower than normal tend to cause exit.

Reference: Oxford Press Dictonary of Economics, 5th edt.

Sources & references
Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.