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?
A) The equilibrium price will rise because the supply curve shifts rightward.
B) The technological improvement shifts the supply curve rightward while the increase in the expected future price shifts the supply curve leftward. The net effect is not known.
C) The equilibrium price falls because the supply curve shifts leftward.
D) The demand curve shifts rightward and the supply curve does not shift.
Correct Answer:
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