Type of Profit Required to stay in Business in Long Run?

[achokshi]

29. Which of the following measures of profit is most likely necessary for a firm to stay in business in the
long run?
A. Economic
B. Normal
C. Accounting


Is it B?? I don’t have the answer key to this test because the link to it is somehow broken. Which is why I’m here asking. Thanks!

 

[S666]

Yep the correct answer is B, “Normal”

 

[Gurifissu]

Yes it is Normal. Normal profit is the one making the economic profit = 0 so Normal profit = accounting profit - economic profit. In order to operate in the long term, you need an economic profit of 0 or higher, and therefore, the normal profit is the relevant one.

 

[madgirl1991]

I knew straight away econ profit had to be zero. if I apply that equation, then why couldnt the answer also be accounting profit?