Match the following. List-I List-II a. Excess of profit total revenue over total explicit cost 1. Normal Profit b. Total profit revenue equals total economic cost 2. Economic Profit c. Excess of total revenue over total of explicit and implicit costs and a normal rate of return 3. Accounting Profit

The correct answer is: C. a-1, b-2, c-3

• Accounting profit is the excess of total revenue over total explicit costs. Explicit costs are the costs that a firm incurs in order to produce its goods or services, and they are paid out in cash. For example, a firm’s explicit costs might include the cost of its raw materials, the cost of its labor, and the cost of its rent.
• Economic profit is the excess of total revenue over total economic cost. Economic cost includes both explicit costs and implicit costs. Implicit costs are the opportunity costs of using resources that could be used in other ways. For example, if a firm owns its own factory, the implicit cost of using the factory is the rent that the firm could have earned if it had rented the factory to another firm.
• Normal profit is the minimum amount of profit that a firm must earn in order to remain in business. Normal profit is equal to the opportunity cost of the firm’s resources. If a firm earns less than normal profit, it will eventually go out of business.

In the given question, option (C) is the only option that correctly matches the definitions of accounting profit, economic profit, and normal profit.