Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It increases both price and quantity due to lower production costs.
B
It has no effect on price but decreases quantity sold.
C
It raises the price while maintaining the same quantity sold.
D
It decreases quantity but increases price due to demand shifts.
Understanding the Answer
Let's break down why this is correct
Answer
When there is a technological advancement in production, it usually makes it easier and cheaper to create a good. This means that producers can make more of the good at a lower cost, which increases the supply in the market. As the supply increases, the price of the good tends to go down because there is more of it available for consumers to buy. For example, if a new machine helps a factory produce twice as many toys in the same amount of time, the extra toys will lead to lower prices, and more people will buy them. Overall, this shift in supply can lead to a new market equilibrium where the price is lower, and more goods are sold.
Detailed Explanation
When technology improves, it makes production cheaper. Other options are incorrect because This answer suggests that prices stay the same but fewer items are sold; This option says prices go up while quantity stays the same.
Key Concepts
Market Equilibrium
Technological Advancements
Supply and Demand
Topic
Explaining Economic Changes
Difficulty
hard level question
Cognitive Level
understand
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