In the long run firms will ________ as long as there are more economies of scale and new firms will enter the industry as long as they earn ________.

A) expand; zero profits
B) contract; positive economic profits
C) contract; zero profits
D) expand; positive economic profits

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in a decreased cost per unit.

Positive Economic Profits

Earnings that exceed the total opportunity costs of all inputs, indicating a return above the normal profit level.

Expand

To increase in size, number, or importance, often relating to businesses aiming to grow through increased operations, product lines, or market reach.