What type of profits are achieved when total revenue is greater than total cost, including opportunity costs?

When total revenue exceeds total cost, including opportunity costs, the type of profits achieved is referred to as abnormal profits. This signifies that a firm is generating more profit than the minimum required to cover all its costs, including the opportunity costs of resources employed in the production process. Abnormal profits indicate the firm is not only covering its costs but also earning a return that is above the typical market rate.

In economic terms, abnormal profits are synonymous with supernormal profits and are a signal of market power or competitive advantage. When firms earn abnormal profits, this can attract new entrants into the market if there are no substantial barriers to entry, leading to increased competition over time. Consequently, if market conditions allow, these abnormal profits may eventually be driven down toward normal levels due to the entry of new competitors.

The other options reflect different profit scenarios: normal profits refer to the minimum required to keep factors of production in their current use, marginal profits relate to the additional profit from producing one more unit, and zero economic profits occur when total revenue equals total costs, indicating no economic incentive for firms to leave or enter the market. In summary, the achievement of profits greater than total costs, including opportunity costs, is indicative of abnormal profits.