After all, the array of products are produced under one organizational roof and the firm, on balance, behaves in accord with the competitive model, earning only normal profits
." However, such a retort would miss my broader point.
the franchisor's selection of an optimal combination of the entry fee and output royalty to offer is constrained by the requirement that the potential franchisee be able to earn at least a normal profit
. At the same time, competition among potential franchisees for the franchise will ensure that no more than a normal profit
need be offered in the terms of the contract." This means that the greater the proportion of the value of the franchise that is extracted through royalties, the smaller the remainder that can be extracted through the franchise fee (i.e., changes in the franchise fee will be negatively related to changes in the value of the stream of royalties).
A fair return is designed to ensure only normal profit
for an efficient organization.
And finally, normal profit
(listen closely, little bookkeepers) is an opportunity cost for capital and enterprise, two of the four categories of inputs used in any and all products.
Cost increases may require higher prices; the eventual necessity of reaching a normal profit
level may also require some price increases.
The OFT said the margin between the wholesale price and the price paid by Sky customers for premium channels, including Sky Sports One and movie channel Sky Premier, may not be wide enough to allow a 'normal profit
' to be made by rivals.
The proposed decision from the Office of Fair Trading is that BSkyB abused its dominant position by preventing cable and digital broadcasters making a "normal profit
For example, military surplus guns that are available in volume from importers or distributors are generally marked up for a normal profit
The move allowed them to cut normal profit
Prior to firm 1's reduction in price, the industry is in Bertrand equilibrium, with each firm charging its profit-maximizing price given the other firm's price, and both firms earn at least a normal profit
These costs--for renting temporary office space, replacing inventory, using different suppliers or outsourcing certain tasks--reduce the entity's normal profit
Rembrandt specialty products such as our Sensitive and Natural Toothpaste formulas, Rembrandt Mouth Rinse, Rembrandt Denture Products and Rembrandt Breath Freshner should be merchandised to enable stores to benefit from their above normal profit