Profits that are earned in a perfectly competitive market, one that is required to attract and retain suppliers. Abnormally high or low profits will cause an unstable equilibrium due to an imperfect market system . As such the price of a good will be really high or really low. A perfectly competitive market is in a state of longterm equilibrium and as such the market will neither experience a shrinkage nor an expansion. Normal profits are equal to the opportunity costs involved in the production or supply of normal goods.
Black’s Law Online Dictionary
