8.8 : 零经济利润

Zero economic profit occurs when a firm's total revenue equals its total cost.

It signifies normal profit rather than a lack of profit.

Understanding this concept requires distinguishing between accounting and economic profit.

Accounting profit is a firm's revenue minus explicit costs like labor, raw materials, and interest expenses.

But economic profit goes a step further. It accounts for implicit costs, which are the value of opportunities that are sacrificed.

Consider a scenario where a woman leaves her software job, which brings in seventy thousand dollars annually, to establish her IT consultancy.

She invests two hundred thousand dollars into this venture. This money could have yielded ten thousand dollars per year if placed in a low-risk investment. This means that her total implicit cost is eighty thousand dollars.

Her firm makes two hundred thirty thousand dollars in the first year, with expenses of one hundred fifty thousand dollars. Her accounting profit is eighty thousand dollars, but when factoring in the implicit costs, her economic profit is zero.

This illustrates that firms earning zero economic profit can cover all costs and earn enough to remain operational.