An improvement in production technology shifts marginal cost
A)downward and does not affect market supply.
B)and market supply downward.
C)and market supply upward.
D)downward and shifts market supply upward.
E)upward and shifts market supply downward.

Question

Quizplus · Accepted Answer

An improvement in production technology reduces the cost of producing each unit of output, which shifts the marginal cost curve downward. This, in turn, shifts the market supply curve downward because producers are now willing to supply more output at each price.

An Improvement in Production Technology Shifts Marginal Cost