I get that its when total revenues equal total cost; but thats a point of no profit no loss. Why would I as an entrepreneur try to get into a business which only promises me normal profits in the future, because I’m basically only subsistence earning.
In: Economics
The other comment makes a similar point, but the concept of “cost” here includes non-monetary costs (opportunity cost is a big one). It’s more of an economic concept than an accounting one – the idea is that normal profit captures some level of return that makes it worth your while to continue engaging in the business given alternatives.
Latest Answers