When a Firm Has Economic Profits Equal to Zero

question 285

Multiple Choice

When a firm has economic profits equal to zero

• A) the firm is earning a normal rate of return on investment.
• B) the firm is not earning a normal rate of return on investment.
• C) the firm should shut down.
• D) the firm's accounting profits are also zero.

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Definitions:

Market Belief

An assumption or conviction held by consumers or market participants about the market or specific aspects of the market, influencing their behaviors and decisions.

Zipf's Law

A statistical distribution principle stating that in a given dataset, the frequency of any item is inversely proportional to its rank in the frequency table.

Marketing Communications

The variety of strategies and tools companies use to communicate with their target market, including advertising, sales promotions, public relations, and direct marketing.

Persuasion

The process of influencing someone's beliefs, attitudes, or behaviors through communication.