If a firm's owner finds that the firm's total revenue is exactly equal to the sum of its explicit and implicit costs, the owner

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Quizplus · Accepted Answer

When a firm's total revenue equals the sum of its explicit and implicit costs, it means the firm is covering all its costs, including a normal profit (implicit costs represent the opportunity cost of the owner's resources). Therefore, the owner is earning as much from this business as they would from their next best alternative, indicating no immediate financial incentive to switch businesses.

If a Firm's Owner Finds That the Firm's Total Revenue