When a profit-maximizing firm in a competitive market has zero economic profit, accounting profit
A)is negative.
B)is at least zero.
C)is also zero.
D)could be positive, negative or zero.

Question

Quizplus · Accepted Answer

Economic profit is calculated after accounting for both explicit and implicit costs, while accounting profit only considers explicit costs. Therefore, even if economic profit is zero, accounting profit can still be positive, as it does not account for implicit costs.

When a Profit-Maximizing Firm in a Competitive Market Has Zero