A new technology is developed for producing solar panels that reduces production costs by 40%. Which of the following is true?
A) Firms will continue to operate efficiently as long as no firm adopts this new technology.
B) For the economy to remain efficient, product produced with this new technology must be equitably distributed to all consumers.
C) This new technology will affect efficiency, and will change the equilibrium price and quantity for this industry.
D) If firms do not adopt this new technology, then the economy will remain in general equilibrium, because firms will not change their price and output decisions.

Question

Quizplus · Accepted Answer

The introduction of a new technology that significantly reduces production costs will likely lead to changes in the supply curve, affecting the market equilibrium price and quantity. Firms adopting the technology can produce at lower costs, potentially lowering prices and increasing output, which impacts overall market efficiency.

A New Technology Is Developed for Producing Solar Panels That