If there is an improvement in the firm's technology,
A) there will be no change in the cost curves in the long run.
B) the firm will move to a lower point on both its long- run and short- run average cost curves.
C) the firm will move to a lower point on its long- run average cost curve only.
D) there will be a downward shift in the long- run average cost curve but not in the short- run average cost curve.
E) both the long- run and short- run average cost curves will shift downward.

Question

Quizplus · Accepted Answer

An improvement in technology typically reduces production costs, causing both the long-run and short-run average cost curves to shift downward.

If There Is an Improvement in the Firm's Technology