hello everyone, just a little thing i cant understand : when the market is at equilibrium, economic profit for suppliers tend to be zero However, surplus of supplier is still positive in the market equilibriurm (sum of differences between marginal cost and selling price)… How could the sum of individual firms not making money (zero economic profit) but still have a global positive surplus in the market ? Thanks by advance a lot for the help !
The difference between the selling price and the cost is the accounting profit, not the economic profit; the economic profit is the accounting profit reduced by opportunity cost.
Those firms that have a positive surplus have a positive accounting surplus, not a positive _ economic _ surplus.