A firm that is earning a positive profit in the short run and expects to continue doing so has an incentive to expand its scale of operation in the long run.

Question

Quizplus · Accepted Answer

If a firm is earning a positive profit in the short run and expects this trend to continue, it has an incentive to expand its scale of operation in the long run to capitalize on its profitable operations and potentially increase its profits further.

A Firm That Is Earning a Positive Profit in the Short