If a firm is making zero economic profit, it can still be making a positive accounting profit.

Name: If a firm is making zero economic profit, it can still be making a positive accounting profit.
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Question

Quizplus · Accepted Answer

Economic profit takes into account both explicit and implicit costs, while accounting profit only considers explicit costs. Therefore, a firm could have positive accounting profit from revenue exceeding explicit costs, but after factoring in implicit costs, it may be making zero economic profit.

If a Firm Is Making Zero Economic Profit, It Can