If a perfectly competitive firm is at the breakeven point, does this mean that it has an accounting profit of zero?
-
This question asked by Anonymous
Ask Your Question
Actually, it has an economic profit of zero and a positive accounting profit. The difference occurs because economists subtract implicit costs and accountants do not. Therefore a zero economic profit is not a bad thing, it means that you covered your opportunity cost, so you could not have done better anywhere else.
- Your Thoughts
- Was this helpful to you? (2 votes)
- Tags
Ask Dirk Now!
Students, got an econ question?
- Who's Dirk?
- More on the man, himself. Meet Dirk
- Econ Media Library
- Check out multimedia tools, videos and more in our Media Library
What People are saying...