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Unformatted text preview: the owners of the firm including the opportunity cost of their time Normal profit is the level of profit just sufficient to keep the owners operating the business in question. Profit is a motivator Adam Smith Profit motivates individuals to provide goods and services that members of society would like to consume and use. Profit creates an incentive for entrepreneurs to produce goods and services that society values. In that sense, profit serves an important social function Competition is the Regulator Competition among entrepreneurs tends, over the long run, to reduce profits to normal levels Competition works best in markets where entry by entrepreneurs is free....
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- Fall '07