A firm that generates zero economic profit usually has
A) negative business profit.
B) zero business profit.
C) positive business profit.
D) business profit equal to half the total revenue.

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting both explicit and implicit costs from total revenue. A firm generating zero economic profit still covers all its costs, including a normal profit (implicit cost), which means it has a positive business profit. Business profit only subtracts explicit costs from total revenue.

A Firm That Generates Zero Economic Profit Usually Has