Economic Profit exists whenever

Question

Quizplus · Accepted Answer

Economic profit exists when a firm earns more than the minimum required to stay in the industry. This means that the firm's revenue is greater than its total costs including the opportunity cost of the resources used in production. It is the excess profit over and above the normal profit required to keep the firm in business. Making even a penny (choice A) or making more than its competitors (choice B) does not necessarily mean that the firm is earning economic profit. Paying taxes (choice D) is a consequence of earning profit, but it does not determine whether the firm is earning economic profit.

Economic Profit Exists Whenever