When economic profit is equal to zero, we say that
A)implicit costs equal zero.
B)a normal profit is being earned.
C)total cost is greater than total revenue.
D)accounting profit is negative.
E)the business is not profitable.

Question

Quizplus · Accepted Answer

When economic profit is equal to zero, it means that the total revenue is enough to cover both explicit (out-of-pocket) and implicit (opportunity) costs, which is referred to as a normal profit. This means the business is operating efficiently and is covering all of its costs, but it is not earning any extra profit above and beyond those costs.

When Economic Profit Is Equal to Zero, We Say That