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Essay text:
Knowing that their investments are not entitled with a fixed rate of return (due to the risk), normal profits for high-risk taker companies are expected to be higher than normal profits for low-risk takers. As the Iraq’s economical activities disrupted due to the threat of US attack, these oil companies gained the advantage of the increase of oil price due to shortage in supplies in the market (refer next theory of profit)
b. Temporary Disequilibrium Theory of Profit:
In nature, crises will have a negative impact to the market and economic activities. Periods before war of Iraq has led to a temporary disequilibrium of oil supply due to the high possibility and risk of an actual war to take place...
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