Assume a new technology further reduces the cost of producing calculators.Also assume that consumers have cut back on their scheduled purchases in anticipation of even more cost-saving developments.As a result, we can expect
A)a decrease in price but no predictable change in output.
B)a decrease in output but no predictable change in price.
C)an increase in output but no predictable change in price.
D)a predictable decrease in both output and price.

Question

Quizplus · Accepted Answer

The reduction in production costs will likely decrease prices, but the anticipation of future savings by consumers may offset changes in output.

Assume a New Technology Further Reduces the Cost of Producing