If economic profit is zero, then a normal profit is earned.

Question

Quizplus · Accepted Answer

Economic profit is defined as total revenue minus total explicit and implicit costs. If economic profit is zero, it means that the revenue earned is just enough to cover all the explicit and implicit costs (including opportunity cost of entrepreneur's own time and resources). This is referred to as a normal profit, which is just enough to keep the entrepreneur in the business and is considered to be the minimum acceptable rate of return for investing in a venture. Hence, if economic profit is zero, then a normal profit is earned.

If Economic Profit Is Zero, Then a Normal Profit Is