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by sclarisse 1072 days ago
That’s economic profits that approach 0. You can still run an accounting profit, it’s just not bigger than it would be if you invested your money somewhere else, like land or mining or coffeeshops or whatever.
1 comments

Economic profit is still there, it's abnormal profits that would go to zero. With zero EP the opportunity cost of staying in business would be to high.

With 0 AP, the industry is in equilibrium, with no companies dropping out, and no companies entering the market.

The economic profit is literally defined as the accounting-type profits, minus the opportunity costs. When the opportunity cost is large like that you are describing negative economic profit.