Question

Firms earning zero economic profit are

a. earning normal profits because their returns on investment are equal to the opportunity costs of the time invested.
b. earning accounting profits because their returns on investment are equal to the opportunity costs of the time invested.
c. losing money and therefore should shut down because their opportunity costs are too high.
d. losing money but they should continue to operate because their opportunity costs are too high.
e.there is not enough information to determine an outcome.

Answer 1

The answer is letter A. Earning normal profits because their returns on investment are equal to the opportunity costs of the time invested.

Step-by-step explanation:

Because all resources are being used efficiently and there is no need to use them elsewhere.