If a firm is earning zero economic profit, then:
A)the firm's revenues are sufficient to pay its explicit costs, but not its implicit costs.
B)the owner will not be able to pay himself or herself a salary.
C)the firm will shut down in the long run, but will continue to operate in the short run.
D)the firm's accounting profit is equal to the firm's implicit costs.

Question

Quizplus · Accepted Answer

Economic profit equals accounting profit minus implicit costs, so if a firm's accounting profit is equal to its implicit costs, then economic profit will equal zero.

If a Firm Is Earning Zero Economic Profit, Then