New production technology in the manufacture of plasma television screens has reduced the number of defective screens. What effect will this have in the market for plasma televisions?
A) The demand curve will increase.
B) The supply curve will increase.
C) The demand and supply curve both increase.
D) The demand curve will decrease.

Question

Quizplus · Accepted Answer

The reduction in defective screens will increase the supply of plasma televisions in the market as there will be more units available for sale. This, in turn, will lower the prices of plasma televisions and shift the supply curve to the right, increasing the quantity supplied at each price level. Therefore, the correct answer is B.

New Production Technology in the Manufacture of Plasma Television Screens