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Asked by David Tovar on Jun 22, 2024

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A firm operating in a perfectly competitive market may earn positive, negative, or zero economic profit in the short run.

Economic Profit

The variance between a company's overall income and its opportunity expenses, covering both direct and indirect costs.

Perfectly Competitive

A market structure where many firms offer goods or services that are similar, allowing for free entry and exit of firms.

Short Run

A period in economics during which at least one input is fixed and cannot be adjusted by a firm.

  • Absorb the theories surrounding economic and accounting profits, along with their consequences for decision-making practices in firms.
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Daniela MorenoJun 27, 2024
Final Answer :
True
Explanation :
In the short run, a firm in a perfectly competitive market can earn positive economic profits due to favorable market conditions, negative economic profits if costs exceed revenues, or zero economic profit where revenues exactly cover all costs, including opportunity costs.

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