If economic profit is equal to zero, then
A) the entrepreneur is earning only a normal profit.
B) the entrepreneur's profit cannot be determined based on the information given.
C) the entrepreneur's profit as measured by accountants is also equal to zero.
D) the entrepreneur's profit as measured by accountants must be less than zero.

Question

Quizplus · Accepted Answer

When economic profit is equal to zero, it means that the entrepreneur is earning a normal profit, which is the minimum profit necessary to keep them in their current industry. This is because economic profit takes into account both explicit and implicit costs, including a normal return on investment.

If Economic Profit Is Equal to Zero, Then