Question

Make a convincing Microecenomics case for "normal profit" to be an exogenous (& objective) amount.

Answer 1

Normal profit is exogenous and objective in the sense that a firm decides whether to remain in the industry or exit based on the concept of opportunity cost. This opportunity cost is the amount that firm can earn in the best possible alternative. Further it is objective. It is a given magnitude and not subjective. Firm knows well how much it can earn in best possible alternative business. Thus profits in other fields determine whether firm is making normal profit or not. In this sense it is exogenous.