Industries in which firms are enjoying positive profits are likely to ________ in the long run.
A) expand
B) contract
C) neither expand nor contract, as firms must earn an economic profit to stay in business
D) expand or contract depending on the normal rate of return

Question

Quizplus · Accepted Answer

In industries where firms are experiencing positive profits, new firms are likely to enter the market, and existing firms may expand their operations to capitalize on the profitable conditions, leading to expansion in the long run.

Industries in Which Firms Are Enjoying Positive Profits Are Likely