Final answer:
When economic profit is zero, accounting profit is positive and equals the implicit costs of owner-supplied resources. This is because accounting profit does not account for opportunity costs, only explicit monetary expenses, whereas economic profit includes both explicit and implicit costs.
Step-by-step explanation:
When considering a firm that employs some resources it owns, it is crucial to understand the difference between economic profit and accounting profit. Accounting profit is calculated as total revenues minus explicit costs—the actual monetary expenses a firm pays out.
Economic profit is more comprehensive, including both explicit and implicit costs, which are the opportunity costs of using owner-supplied resources.
If a firm has zero economic profit, it means that its total revenue is exactly equal to the sum of both its explicit and implicit costs. In this situation, the accounting profit would not be zero but positive because it does not deduct the implicit costs.
The accounting profit would be equal to the implicit costs of the resources, indicating that the firm is covering all its costs, including the opportunity cost of the resources used in production.