A firm that breaks even after all economic costs are paid is earning ?
Correct answer: C. Normal profit
- A. Economic profit
- B. Accounting profit
- C. Normal profit
- D. Supernormal profit
Explanation
Breaking even after all economic costs, including opportunity costs, means economic profit is zero. This zero-profit return is called normal profit, while profit above it is supernormal profit.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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