When total revenue minus total cost is equal to zero, the firm is:
A) earning above-average economic profit.
B) earning a normal profit.
C) losing too much money to stay in business.
D) earning abnormally low profits.

Question

Quizplus · Accepted Answer

Total revenue minus total cost being equal to zero means that the firm is breaking even and earning only a normal profit, which is just enough to cover its costs but not earning above-average economic profits or losing money.

When Total Revenue Minus Total Cost Is Equal to Zero