PRC-3 · Chapter 12 · Question 63 of 69
When a firm generates exactly enough total revenue to cover all its explicit accounting costs PLUS the implicit opportunity costs of the owner's time and capital, the firm is earning:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Normal profit (Breakeven)
Explanation
Normal profit is the exact minimum return necessary to keep an entrepreneur in the industry. It is the condition of economic break-even where TR = Total Economic Cost.
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