If economic profits in an industry are zero and implicit costs are greater than zero, then

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Quizplus · Accepted Answer

When economic profits are zero, it means that all costs, including both explicit (accounting costs) and implicit (opportunity costs), are being covered. If implicit costs are greater than zero, it implies that there are opportunity costs being incurred. Since economic profit accounts for both explicit and implicit costs, and accounting profit only accounts for explicit costs, having a zero economic profit and positive implicit costs means that the accounting profits (which do not deduct implicit costs) must be greater than zero.

If Economic Profits in an Industry Are Zero and Implicit