Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
B → D → C → A
B
B → A → D → C
C
D → C → B → A
D
A → C → B → D
Understanding the Answer
Let's break down why this is correct
Answer
To understand how a technological advancement affects market prices and quantities, we start with a new technology that reduces production costs for firms. This allows firms to produce more products at a lower price. As the price drops, consumers notice and respond by increasing their demand for those products. In turn, firms increase production to meet this higher demand, and finally, market prices adjust to find a new balance between supply and demand. For example, if a new machine makes it cheaper to produce smartphones, more people might buy them, leading to an increase in production and possibly a drop in prices.
Detailed Explanation
First, new technology lowers production costs for companies. Other options are incorrect because This option suggests that consumers change their buying habits before prices drop; This option starts with price adjustments before any changes in production.
Key Concepts
Market Dynamics
Technological Advancements
Supply and Demand
Topic
Explaining Economic Changes
Difficulty
medium level question
Cognitive Level
understand
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