When a company's economic profit is zero, what will the accounting profit most likely be?

Question

Quizplus · Accepted Answer

When a company's economic profit is zero, it means that it has covered all its explicit (accounting costs) and implicit (opportunity costs) costs. Accounting profit only considers explicit costs, so if economic profit is zero, the company must have made enough to cover both explicit and implicit costs, implying that the accounting profit would be positive.

When a Company's Economic Profit Is Zero, What Will the Accounting