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Question 49 0.4 pts Use the following scenario to answer the following questions: Carmela's Churros is a perfectly competitive firm that sells desserts in Houston Texas. Carmela's Churros currently is taking in $40,000 in revenues, and has $15,000 in explicit costs and $25,000 in implicit costs. Carmela's Churros' economic profits are O$40,000 O $15,000 O $80,000 O $25,000 Question 50 0.4 pts You can tell a firm is operating in a market that is in long-run competitive equilibrium if economic profits are zero accounting profits are zero accounting profits are negative economic profits are positive economic profits are negative

Answer 1

49) The correct answer is the third option $0. Economic profit takes into account the explicit as well as the implicit cost. So, the economic profit here is $0 [ 40000 -25000 -15000].

50) The correct answer is the first option, economic profits are zero. In the long run in a competitive market, there is zero economic profit.