A firm currently has $100,000 in assets and is making an accounting profit of$8,000. All of the employees
A firm currently has $100,000 in assets and is making an accounting profit of$8,000. All of the employees
are paid a salary. The owner of the business does
not work there. Which of the following are true?
I. The firm should continue to operate in the short run
II. The firm should continue to operate in the long run if the normal rate of
return is 10%
III. The economic profit is larger than -$92,000
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