Accountants refer to zero economic profit as

Question

Quizplus · Accepted Answer

Zero economic profit is referred to as normal profit, which is the minimum level of profit needed to keep resources in their current use. It is the part of the total revenue that covers the opportunity cost of all the inputs used to produce the output, including the entrepreneur's own time and effort. Normal profit is not an accounting profit but an economic concept that indicates whether a business is covering all its costs and earning a fair return on its investment. Therefore, choices A, B, C, and E are not correct because they do not reflect the economic meaning of zero economic profit.

Accountants Refer to Zero Economic Profit as