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.

Positive Profit

A financial gain that occurs when the revenues received from business activities exceed the expenses, costs, and taxes needed to sustain the activity.

Scale of Operation

The size at which a company or factory operates, often impacting its production efficiency and costs.

Long Run

pertains to a time period in economics during which all factors of production and costs are variable, allowing for full adjustment to any change.