If a firm in many differentiated sellers is making zero economic profit:
A) it will increase the price of the product.
B) it will shut down and look for another type of business to enter.
C) it will continue to operate as long as both explicit and implicit costs are covered.
D) none of the above is necessarily correct

Question

Quizplus · Accepted Answer

A firm making zero economic profit is covering all its explicit and implicit costs, including a normal return on investment, so it will continue to operate.

If a Firm in Many Differentiated Sellers Is Making Zero