Question

Lilly is the price-taking owner of an apple orchard. The price of apples is high enough that Lilly is earning positive economic profits. In the long run, Lilly should expect:

Answer 1

Lower the apple prices as there is entry of the new firms.

Step-by-step explanation:

As Lily is the price taking owner of the apple orchid, which means that the there is only a single firm or company which is Lily, who have the right to set the price on its own as there is no influence of other firms in the market.

Due to which the price of apples is high and leads to earn the positive economic profits. But this could be short term as in the long term, there could be the entry of the new firms in the market, which will influence the price of the apples and lead to decrease in the prices as well.