If a perfectly competitive seller is maximizing profit and is making zero economic profit,which of the following will this seller do?

Question

Quizplus · Accepted Answer

If the perfectly competitive seller is making zero economic profit, it means that the seller is earning enough to cover all the costs including opportunity cost of the resources used in the production. Therefore, the seller has no incentive to exit or switch to another opportunity. Also, there is no room to increase production to make an economic profit as the market price is only covering the costs. Hence, the seller will continue at the current output and make zero economic profit. Therefore, the correct option is C.

If a Perfectly Competitive Seller Is Maximizing Profit and Is