Answer to Question #82925 in Microeconomics for zirbi annie kadu

Question

why do competitive firms stay in business if they make zero profit?

Answer 1

Zero profit means that these firms still cover all the fixed and variable costs. They are stiil able to pay salary to workers and managers. They are able to conquer some particular share of the market. Taking it into account, they expect growing slaes, and respectively profits, in the future.