MONOPOLISTIC CONCEPTS 1
Assignment 2: Monopoly
Simon Derstine
The University of Findlay
ECON 200: Principles of Macroeconomics
Dr. VanderPal
September 19, 2021
MONOPOLISTIC CONCEPTS 2
Assignment 2: Monopoly
Zero Economic Profit
Investors would consider investing in a firm that is making zero economic profit for a
variety of reasons. A firm that is making zero economic profit is not necessarily a bad thing
because all it means is that the way a company uses its resources produces the same amount of
profit as the next best alternative way to use its resources (Harper College, n.d.). For example, if
a grain company made the same amount of profits selling their supply in Ohio as they do in
Indiana, then the opportunity cost equals the accounting profits so they will be operating at zero
economic profit; assuming Indiana is the next best alternative.
Investors would also understand that a firm can still be making what is called “accounting
