Answer to Question #70352 in Economics for Dillan pink

Question

What does it mean for a firm to be suffering n economic loss? Does this imply that the firm is earning a negative profit in the accounting sense? Explain

Answer 1

Economic loss is the loss resulting to a firm due to cash outflows and the decline in the ability to make money as a firm.
If firms in an industry are experiencing economic losses, some will leave the market. The supply curve shifts to the left, increasing price and reducing losses. Firms continue to leave until the remaining firms are no longer suffering losses—until economic profits are equal to zero.