There is a technological advance in the production of a good and simultaneously also an increase in the expected future price. Which of the following will happen?

Question

Quizplus · Accepted Answer

A technological advance typically shifts the supply curve rightward, indicating an increase in supply. However, an increase in the expected future price can cause the supply curve to shift leftward as producers may hold back supply to sell at higher future prices. The net effect on equilibrium price and quantity is uncertain without more information.

There Is a Technological Advance in the Production of a Good