If a firm is earning negative accounting profits,it implies

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Accounting profits only take into account explicit costs whereas economic profits also include implicit costs. When a firm is earning negative accounting profits, it means that their explicit costs are greater than their revenue. However, it is possible that the firm is still earning some revenue to cover their implicit costs, leading to negative economic profits. Therefore, the best choice is option C - that the firm's economic profits are negative.

If a Firm Is Earning Negative Accounting Profits,it Implies