Profit and its Maximization in Economics

The video tutorial explains the difference between accounting and economic profit, highlighting the role of opportunity costs. It covers how to calculate profit by subtracting total costs from total revenue and represents this graphically. The concept of profit maximization is explored, showing how firms can achieve it by equating marginal revenue with marginal cost. The tutorial also discusses normal and supernormal profits, providing a comprehensive understanding of profitability in business.

Discuss how external factors can influence the reported profit of a business.

What happens to a firm's profitability when marginal revenue is equal to marginal cost?

How can a firm achieve supernormal profit, and what does it allow them to do?

What is the impact on a firm when average costs exceed average revenue?