economic profit is positive,

Question

Quizplus · Accepted Answer

Economic profit is positive when the total revenue (TR) exceeds the total economic cost (TEC), which includes not only explicit costs but also implicit costs such as the opportunity cost of the owners' resources. Therefore, economic profit is a measure of the firm's profitability that takes into account both monetary and non-monetary costs. Option B is not correct because solving the principle-agent problem is a separate issue that may or may not affect economic profit. Option C is not correct because economic profit is a measure of the firm's performance, not the owners' wealth specifically. Option D is not correct as it has nothing to do with economic profit.

Economic Profit Is Positive