If Pets.com is earning a rate of return less than necessary for the business to continue operations, then
A) total revenue exceeds economic costs.
B) economic costs exceed total revenue.
C) normal profit is zero.
D) economic profit is zero.

Question

Quizplus · Accepted Answer

Economic costs exceed total revenue when a business is earning a rate of return less than necessary to continue operations, indicating the business is not covering its total economic costs, which include both explicit and implicit costs.

If PetsCom Is Earning a Rate of Return Less Than Necessary