What term describes the state when profits are too low to draw in new firms?

The term that describes the state when profits are too low to draw in new firms is known as normal profit. Normal profit occurs when a firm's total revenue is equal to its total costs, including both explicit and implicit costs. In this situation, firms earn just enough to cover their costs and remain in business, but there is no incentive for new firms to enter the market, as potential profits are not above the opportunity costs of capital and labor.

In contrast, abnormal profit refers to profits that exceed normal profit, providing an incentive for new firms to enter the market. Complete profit is not a recognized term in economic theory, and market equilibrium describes a point where supply equals demand, without giving specific information about profit levels. Therefore, normal profit accurately captures the condition where profits are insufficient to attract new entrants into the market.