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Abnormal profit
When a firm's average revenue is greater than its average costs.
Allocative Efficiency
State of the economy in which the combination and quantity of goods and services produced is aligned with the preferences of consumers and producers, maximising social surplus.
Market power
The degree to which a firm in a market is able to control its output price.
Normal profit
When a firm’s total revenue exactly covers total costs. It is the minimum level of profit that the firm needs to earn in order to remain in the market in long term.