Asked by
Moses Motsamai
on Nov 04, 2024Verified
Firms that are "breaking even" are
A) earning zero economic profits.
B) earning less than a normal rate of return.
C) shutting down in the short run.
D) All of the above are correct.
Economic Profits
The surplus remaining after total costs are deducted from total revenue, factoring in both explicit and opportunity costs.
Normal Rate
Refers to the standard, expected rate in financial or economic contexts, often used as a benchmark.
Short Run
The period of time for which two conditions hold: The firm is operating under a fixed scale (fixed factor) of production, and firms can neither enter nor exit an industry.
- Identify and calculate break-even points for businesses.
Verified Answer
XZ
Learning Objectives
- Identify and calculate break-even points for businesses.