A competitive market creates strong pressure for technological innovation that
A)Allows the firm to raise the price of its product.
B)Provides the firm with more market power.
C)Shifts the firm's demand curve to the right.
D)Shifts the supply curve to the right.

Question

Quizplus · Accepted Answer

In a competitive market, firms are constantly seeking ways to differentiate themselves and gain an advantage over their rivals. Technological innovation allows a firm to produce goods and services more efficiently and effectively, which has the effect of shifting the supply curve to the right. As a result, the firm can produce and sell more products at a lower cost, which ultimately leads to higher profits. This benefit of technological innovation is what creates strong pressure for firms to invest in new technologies and stay ahead of the competition.

A Competitive Market Creates Strong Pressure for Technological Innovation That