The authors explain that a firm earning a zero economic profit in the long run has earned a competitive return on their investment. What do they mean by "competitive" return in this context?
A) The firm's return could only be earned under perfect competition and would be smaller under imperfect competition.
B) The firm's return is at least as larger as the returns earned by other firms.
C) The firm's return is at least as larger as could be earned in another investment.
D) The firm's return is negative, which initiates stronger competition among firms in the market.

Question

Quizplus · Accepted Answer

A competitive return means the firm's return is at least as large as could be earned in another investment, indicating the firm is covering its opportunity costs, including a normal profit.

The Authors Explain That a Firm Earning a Zero Economic