If Firm A is making zero economic profits:
A) Firm A's accountant reports that it is making zero profits.
B) Firm A is breaking even when opportunity cost is taken into consideration.
C) other firms want to enter the market.
D) Firm A wants to leave the market.
E) Firm A wants to stop producing in the short run.

Question

Quizplus · Accepted Answer

Zero economic profits mean that the firm is covering all of its costs, including opportunity costs. Therefore, it is breaking even.

If Firm a Is Making Zero Economic Profits