If a firm is earning zero economic profits:
A)its revenues are sufficient to pay explicit costs,but not implicit costs.
B)the owner will not be able to pay himself or herself a salary.
C)it will shut down in the long run,but will continue to operate in the short run.
D)the owners are earning a return on their time and investment that is equal to the opportunity costs of that time and investment.

Question

Quizplus · Accepted Answer

Normal profit,or the opportunity cost of the owner's resources,is an implicit cost and so is subtracted from revenue in calculating economic profit.

If a Firm Is Earning Zero Economic Profits