above-normal profit

above-normal profit

or

excess profit

a PROFIT greater than that which is just sufficient to ensure that a firm will continue to supply its existing product or service (see NORMAL PROFIT). Short-run (i.e. temporary) above-normal profits resulting from an imbalance of market supply and demand promote an efficient allocation of resources if they encourage new firms to enter the market and increase market supply. By contrast, long-run (i.e. persistent) above-normal profits (MONOPOLY or supernormal profits) distort the RESOURCE ALLOCATION process because they reflect the overpricing of a product by monopoly suppliers protected by BARRIERS TO ENTRY.

See PERFECT COMPETITION.

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It also continues to make above-normal profit margins - expected to be around 27% this year, compared with 7.
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Based on the literature review, we developed a simple framework that incorporates a Disruption Contingency Plan (DCP) to provide business continuity and opportunity to increase market share in the event of supply chain disruptions, thus creating normal or above-normal profits.
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s above-normal profits deserve applause and not ridicule.
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Statement by Alan Greenspan, Chairman, Board of Governors of the Federal Reserve System, before the Committee on Banking and Financial Services, US. House of Representatives, October 1, 1998
Since all above-normal profits would be competed away, prices should be aligned with cost now to remove the incentive for entry.
Competition and Innovation in Postal Services
This challenge is suspect because if a market is competitive, above-normal profits, whatever their origin, should be driven down to a competitive level.
Statements to Congress

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