Which of the following is true when a firm in a perfectly competitive market is earning zero economic profits?

Question

Quizplus · Accepted Answer

When a firm in a perfectly competitive market is earning zero economic profits, it means that the firm is covering all its costs, including opportunity costs. This implies that the income the business owners are earning from the firm is equivalent to what they could earn from their next best alternative use of their time and resources. Zero economic profit is a normal condition in the long run for a perfectly competitive market, indicating that resources are being allocated efficiently.

Which of the Following Is True When a Firm in a Perfectly