If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is

Name: If most firms in an industry are earning a 7 percent rate of return on their assets, but your business is earning 9 percent, your rate of economic profit is
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Question

Quizplus · Accepted Answer

Economic profit is the difference between the rate of return of your business and the average rate of return in the industry, which is 9% - 7% = 2%.

If Most Firms in an Industry Are Earning a 7