Chapter 3: Problem 11

An improvement in technology causes a (an) a. leftward shift of the supply curve. b. upward movement along the supply curve. c. firm to supply a larger quantity at any given price. d. downward movement along the supply curve.

Short Answer

Expert verified

An improvement in technology causes a firm to supply a larger quantity at any given price (option c). This is because technological advancements enable producers to increase output with the same resources, leading to a rightward shift of the supply curve.

Step by step solution

Option a: Leftward shift of the supply curve

Technological improvements generally lead to increased production capabilities, which in turn lead to a greater quantity of goods being produced at each price level. This change in the supply curve would be represented by a shift to the right, not the left. Therefore, option a is incorrect.

Option b: Upward movement along the supply curve

An upward movement along the supply curve occurs when the quantity of goods produced increases in response to a higher price, holding other factors constant. The question, however, refers to an improvement in technology, which is an external factor affecting production capabilities, not a change in price. Hence, option b is incorrect.

Option c: Firm to supply a larger quantity at any given price

This option is consistent with the impact of an improvement in technology. Technological advancements usually enable producers to produce more output with the same resources, which is equivalent to producing the same output at a lower cost. As a result, firms can supply a larger quantity of goods at any given price level, leading to a rightward shift of the supply curve. Option c is the correct choice.

Option d: Downward movement along the supply curve

A downward movement along the supply curve occurs when the quantity of goods produced decreases in response to a lower price, holding other factors constant. Similar to option b, this option does not consider the external factor of technological advancements that improve production capabilities. Thus, option d is incorrect. In conclusion, the correct answer is:

Answer

c. Firm to supply a larger quantity at any given price.

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