Answer to Question #140035 in Microeconomics for mia

Question

From the firm's perspective, is an accounting profit of zero a good result, a bad result, or merely a satisfactory result? Why? Is an economic profit of zero a good result, a bad result, or merely a satisfactory result? Why?

Answer 1

When accounting profit of an organization is zero, that means , it is making an economic loss though it takes opportunity cost into account. This implies that zero accounting profit is a bad result for any organization.

When economic profit of an organization or any business is zero,then that business is in a state of profit. Hence, zero economic profit is a good result for the business.