"Let us change our estimates of implicit costs. Assume that Pizza Party Place buys a machine that makes pizza and does not need pizza chefs. Your next best job is now counter sales of pizza at $20,000 per year. Boogie Burger discovers they overestimated the traffic count at your location and lowers their rental offer to $8,000. And the Federal Reserve Board lowers interest rates to 4.0% at your bank on your $50,000 savings.

1. What is your best option now?

Normal Profit and Economic Profit. If the alternative uses of the factors of production generate the same level of income as their present use, then implicit costs will be the same size as accounting profits, and economic profits will be zero -- that is, no economic profit or loss.

1. When economic profits are zero, the business is making a _____________________ in an accounting sense.

______________ __________ are usually stated as a percentage return on the capital invested in the business. The _____________ ___________ is usually calculated as the average return on capital for an entire industry, or the entire country.