If Overstock.com earns a rate of return exactly equal to what is necessary for it to continue operations, then its
A) total revenue exceeds its economic costs.
B) economic costs exceed its total revenue.
C) normal profit is zero.
D) economic profit is zero.

Question

Quizplus · Accepted Answer

When a company earns a rate of return exactly equal to what is necessary to continue operations, it means it is covering all its costs, including opportunity costs, resulting in an economic profit of zero. Economic profit is total revenue minus total costs, where total costs include both explicit and implicit (opportunity) costs.