The introduction of a new cost-saving production technology will shift the ﬁrm's short-run average cost curve downward at each level of output.

Question

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When a new cost-saving production technology is introduced, it allows the firm to produce the same output with fewer inputs or resources, which reduces the average cost of production. As a result, the short-run average cost curve shifts downward at each level of output, indicating that the firm can now produce the same quantity of output at a lower cost.

The Introduction of a New Cost-Saving Production Technology Will Shift