-In the above figure, starting at E3, if there is an increase in technology that causes a permanent increase in production capabilities

Question

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An increase in technology causes a permanent increase in production capabilities, which means that the long-run aggregate supply curve (LRAS) will shift to the right. In the short run, the aggregate supply curve (SRAS) will also shift to the right, but it will not shift as far as the LRAS. This is because in the short run, there are some factors of production that are fixed, such as the number of workers and the amount of capital. In the long run, however, all factors of production are variable, so the LRAS can shift more than the SRAS.

-In the Above Figure, Starting at E3, If There Is