Short-run profit in perfect competition market
In the short term, perfect competition market will have three different types of profit
such as supernormal profit, normal profit and subnormal profit.
A. Supernormal Profit
The profit maximization occurs when marginal cost equal marginal revenue at a
price of P (RM20) and quantity at Q (9 units).
The firm earns supernormal profit when average revenue (AR) is greater than
average...
