When a company earns zero economic profit then it means that it has been able to pay off and cover all its costs. This does not mean that the firm should go out of business. In fact, in the long run in a perfectly competitive market, the firms are never able to earn a positive or abnormal profit; they always earn zero economic profits. This is because there are so many competitors in the market that they are all competing on cost cutting and low prices. This means that it is alright to earn a zero economic profit and it should continue to operate. It should only close down when its is unable to cover the costs and make a loss.
