Asked by
Quinn Lendyll Teope
on Dec 19, 2024Verified
Zero economic profits mean that the firm is earning
A) revenues that just cover all of its actual expenses.
B) accounting profits that are equal to its accounting costs.
C) as much as what it would have earned in its best alternative business venture.
D) revenues that are equal to its accounting profits.
Economic Profits
The distinction between the total income of a company and its overall expenses, encompassing both direct and indirect costs.
Actual Expenses
The real or verified costs incurred during a specific period for operations, projects, or activities.
Accounting Costs
The actual expenses and cash outflows that a business incurs, captured in its financial records.
- Recognize the significance of zero economic profits and what it implies about a firm’s performance relative to its alternatives.
Verified Answer
AS
Learning Objectives
- Recognize the significance of zero economic profits and what it implies about a firm’s performance relative to its alternatives.