If economic profit is equal to zero then the firm is making
A)a normal profit.
B)zero profit as recorded by accountants.
C)negative profit as recorded by accountants.
D)zero taxable income.
E)an amount equal to the implicit rental rate.

Question

Quizplus · Accepted Answer

A zero economic profit means that the firm is earning enough revenue to cover all of its costs, including the opportunity cost of the owner's time and capital investment. This is commonly referred to as a normal profit, as the firm is earning enough to remain in business but is not making any excess profit above this level.  Therefore, option A is the correct choice.

If Economic Profit Is Equal to Zero Then the Firm