An improvement in production technology will shift the

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BlackTom AI · Accepted Answer

An improvement in production technology typically makes production more efficient, reduces costs, or increases output capabilities. This improvement affects the firm’s ability to supply more of the good at every price, which is represented graphically by a rightward shift of the supply curve.

Option 1: 'demand curve to the right.' Demand shifts are driven by changes in consumer preferences, income, prices of related goods, expectations, or number of buyers, not by improvements in production technology. Therefore this option misattributes the source of the shift.

Option 2: 'supply curve to the right.' This matches the standard explanation: better technology lowers marginal cost or increases productivity, enabling sellers to offer more quantity at each price, shifting the supply curve outward to the right.

Option 3: 'demand curve to the left.' A leftward demand shift would occur due to a decrease in quantity demanded at each price, driven by factors like falling income or tastes changing against the good. It is not connected to production technology improvements, making this option incorrect.

Option 4: 'supply curve to the left.' A leftward shift of supply would reflect a decrease in supply, such as higher costs or reduced capacity. Since technology improvement increases, not decreases, supply, this option contradicts the typical effect of technological gains.

In summary, the only option that aligns with the economic effect of improved production technology is a rightward shift of the supply curve, reflecting greater supply at each price.

An improvement in production technology will shift the

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An improvement in production technology will shift the

View Explanation

Log in for full answers

Similar Questions

Part D: An increase in the price of pizza sauce will cause a movement from point B on supply curve S2 to

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What effect would a new tax on producers likely have on the supply curve?

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