Answer to Question #36514 in Microeconomics for lasisi

Question

Improvement in technology calls for?

a. shift the demand curve to the left
b. shift the supply curve to the right
c. shift the supply curve to the left
d. move along the supply curve

Answer 1

An improvement in technology shifts the supply curve outward (to the right) because the cost to produce the good decreases, so they can make more products at a lower cost for any given quantity.

Shifting the curve outward would decrease the price and increase quantity sold. In a perfectly competitive market, the profit will always be at 0, where the demand and supply curve intersect. So, the right answer is b. shift the supply curve to the right