In the long run firms will expand as long as there are more ________, and new firms will enter the industry as long as they earn ________.

A) economies of scale; zero profits
B) economies of scale; positive economic profits
C) diseconomies of scale; zero profits
D) diseconomies of scale; positive economic profits

Economies of Scale

The cost advantage achieved by businesses when production becomes efficient, as the scale of operation increases leading to a reduction in average costs.

Positive Economic Profits

Earnings that exceed the total costs, including both the explicit and implicit costs of a business.

Expand

To increase the scale, scope, or size of something, often used in the context of business growth or economic expansion.