When a firm earns a normal rate of return, it
A) earns a profit.
B) breaks even.
C) suffers a loss.
D) should shut down.

Name: When a firm earns a normal rate of return, it A) earns a profit. B) breaks even. C) suffers a loss. D) should shut down.
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Question

Quizplus · Accepted Answer

When a firm earns a normal rate of return, it is covering all its costs, including the opportunity cost of capital, which means it is breaking even, not making an economic profit or loss.

When a Firm Earns a Normal Rate of Return, It