If Microsoft is earning a rate of return greater than the return necessary for the business to continue operations in the long run, then
A) total costs exceed total revenue.
B) total costs exceed a normal rate of return.
C) the normal rate of return is zero.
D) the firm is earning an economic profit.

Question

Quizplus · Accepted Answer

Earning a rate of return greater than the return necessary for the business to continue operations in the long run indicates that the firm is earning an economic profit, as it is making more than what is needed to cover its costs and the normal rate of return.

If Microsoft Is Earning a Rate of Return Greater Than