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

question 372

Multiple Choice

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.

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Definitions:

Capital

Man-made physical objects (factories, roads) and intangible ideas (the recipe for cement) that do not directly satisfy human wants but which help to produce goods and services that do satisfy human wants; also called capital goods. One of the four economic resources.

Economic Rent

Any payment to a resource provider or seller of output in excess of the economic cost (opportunity cost) of providing that resource or output.

Economic Rent

The extra income earned by a resource over and above its opportunity cost, often due to natural advantages or market conditions.