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Information about Abnormal Profit

In economics supernormal profit, also called economic rent, abnormal profit or pure profit or excess profits, is a profit exceeding the normal profit. Normal profit equals the opportunity cost of labour and capital, while supernormal profit is the amount exceeds the normal return from these input factors in production.

Abnormal profit is usually generated by an oligopoly or a monopoly; however, these firms often try to hide this from the market to reduce risk of competition or antitrust investigation.

In principle there are three kind of supernormal profit:

See also

References

Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Greek for oikos (house) and nomos (custom or law), hence "rules of the house(hold).
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This article is about Economic rent as it pertains to political economy and socioeconomic theory. For other uses, see Rent.


Economic rent
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For the television series, see Profit (TV series)
Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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For the television series, see Profit (TV series)
Profit generally is the making of gain in business activity for the benefit of the owners of the business.
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In economics, opportunity cost, or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits which could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i.e.
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labour (or labor) is a measure of the work done by human beings. It is conventionally contrasted with such other factors of production as land and capital. There are theories which have created a concept called human capital (referring to the skills that workers possess, not
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In economics, capital or capital goods or real capital refers to already-produced durable goods available for use as a factor of production. Steam shovels (equipment) and office buildings (structures) are examples.
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An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few sellers.
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monopoly (from Greek monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service, in other words a firm that has no competitors in its industry.
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United States
  • Sherman Antitrust Act
  • Clayton Antitrust Act
  • Robinson-Patman Act
  • Federal Trade Commission Act
  • Essential facilities doctrine
  • Noerr-Pennington doctrine
  • Rule of reason
Europe
  • European Community
    competition law

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In economics, a firm is said to reap monopoly profits when a lack of viable market competition allows it to set its prices above the equilibrium price for a good or service without losing profits to competitors.
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See also:
  • Hotelling's rule
resource economics

References

1. ^ Scherzer, J. and Sinner, Jim, Resource Rent: Have you paid any lately? Ecologic Research Report No.8, December 2006, available at www.ecologic.org.nz
2.

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original research or unverifiable claims.
* It does not cite any references or sources. Please help improve this article by citing reliable sources.
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A windfall gain is any type of income that is unexpected.[1]

Types of Windfall Gains

The list of windfall gains includes, but is not limited to:
  • Lottery winnings
  • Unexpected inheritance
  • Gains from demutualization


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Taxation in the United States

This article is part of the series:
Politics and government of
the United States


Federal taxation
History Internal Revenue Service
Tax Court   Tax forms

Income tax   Payroll tax
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