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“Economic profits result whenever only a few large competitors are active in a given market.” Discuss...

“Economic profits result whenever only a few large competitors are active in a given market.” Discuss this statement using an example for illustration.

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There are two types of profit that a firm earn in doing business in any given market. One is normal profit, which is nothing but zero profit in simple words. That is, when a firm covers all expenses/costs with its revenue and left with no margin, it is earning normal profit.On the other hand, a firm which is covering all its costs with its revenue and also get some margin over costs, it is earning super normal profit. Super normal profit is also known as economic profit.The statement that "Economic profits result whenever only a few large competitors are active in a given market" does not hold truth.There are different types of market structure for example monopoly, oligopoly, perfect and monopolistic competition.

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