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Caught in this empty core, no one is really satisfied, including Network, which is unable to earn normal profits because of these periodic "price wars" it is forced to fight.
In the static model world in which goods are given, normal profits need cover no more than opportunity cost, but little in the way of risk costs.
A fair return is designed to ensure only normal profit for an efficient organization.
They have not adjusted to anything like normal profit margins, as Phil Meyer notes in this issue (see "Learning to Love Lower Profits," page 40).
AT&T states categorically that they will hold users responsible for long distance charges, although some fraud victims have negotiated a payment scheduled less the normal profit the telco realizes on such service.
The White Paper distinguishes between normal profit intangibles and high-profit potential intangibles.
What we're seeing yesterday and today is normal profit taking," said Chahir Hosni, equity sales manager at EFG-Hermes Holding SAE in Dubai.
For example, military surplus guns that are available in volume from importers or distributors are generally marked up for a normal profit margin.
A spokesman for Mishcon de Reya said their fees were mainly for legal work on behalf of the fund and were not profits - adding that the firm had given a 20 per cent discount "which is equivalent to its normal profit margin.
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 margin.
Gross Margins - Gross margins for the fourth quarter versus the corresponding period a year ago were lower due to a nonrecurring contract that produced higher than normal profit margins during the third and fourth quarters of 2001.