The correct option is (D): If a firm makes zero economic profits this means that the firm can be earning positive business profits.
Zero economic profit means the firm is earning a minimum profit which is necessary to remain in the business
According to economic competition theory, the zero-profit condition is what arises when the cost of entering or leaving a given industry is as close to zero as possible. If they predict that they will make a good economic profit in this scenario, those businesses that are not now in the industry are more likely to do so (profit in excess of the cost of acquiring investible funds).
As more businesses enter the market, competition will eventually drive down economic profit per firm to zero. In contrast, if businesses are losing money, enough of them will leave the market until the economic profit per firm becomes zero.
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