Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It shifts to the left
B
It shifts to the right
C
It remains unchanged
D
It becomes vertical
Understanding the Answer
Let's break down why this is correct
Answer
When production costs decrease because of technological advancements, the aggregate supply curve shifts to the right. This means that businesses can produce more goods and services at lower prices, which is good for the economy. For example, if a factory uses new machines that are faster and cheaper to operate, it can make more products without spending as much money. As a result, the overall supply of goods in the market increases, leading to lower prices for consumers. This shift can help stimulate economic growth and create more jobs in the long run.
Detailed Explanation
When production costs go down, businesses can make more goods for less money. Other options are incorrect because Some might think lower costs mean less supply; It's a common mistake to think costs don't affect supply.
Key Concepts
Aggregate Supply
Topic
Aggregate Demand and Supply Shifts
Difficulty
easy level question
Cognitive Level
understand
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