If Firm a Is Making Zero Economic Profits

question 65

Multiple Choice

If Firm A is making zero economic profits,

• A) Firm A is also making negative accounting profits.
• B) Firm A is breaking even when opportunity cost is taken into consideration.
• C) other firms want to enter the market.
• D) Firm A wants to leave the market.
• E) Firm A wants to shut down in the short run.

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Definitions:

Experience

The knowledge or skill obtained from involvement in or exposure to events or activities over a period.

Average Salary

The mean income calculated by dividing the total salary of a group by the number of individuals in that group.

Increased

A term describing something that has become larger or greater in size, amount, or degree.

Decreased

Reduced or lessened in amount, size, strength, or intensity.