$$\begin{array} { | c | c | c | }
\hline \text { Price Per Unit } & \text { Quantity Supplied } & \text { Quantity Demanded } \
\hline \$ 10 & 100 & 295 \
\hline 11 & 150 & 275 \
\hline 12 & 190 & 250 \
\hline 13 & 220 & 220 \
\hline 14 & 245 & 180 \
\hline 15 & 265 & 135 \
\hline
\end{array}$$ Refer to the above table. A technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price. As a result of this technological change,
Equilibrium output in this market
A) decreased by 60 units.
B) increased by 60 units.
C) increased by 30 units.
D) decreased by 30 units.

Question

$$\begin{array} { | c | c | c | } 
\hline \text { Price Per Unit } & \text { Quantity Supplied } & \text { Quantity Demanded } \
\hline \$ 10 & 100 & 295 \
\hline 11 & 150 & 275 \
\hline 12 & 190 & 250 \
\hline 13 & 220 & 220 \
\hline 14 & 245 & 180 \
\hline 15 & 265 & 135 \
\hline
\end{array}$$ Refer to the above table. A technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price. As a result of this technological change,
Equilibrium output in this market
A) decreased by 60 units.
B) increased by 60 units.
C) increased by 30 units.
D) decreased by 30 units.

Quizplus · Accepted Answer

The original equilibrium is at a price of $13 with a quantity of 220. With a 60-unit increase in supply at each price, the new supply at $13 is 280. The new equilibrium is at $12, where the new supply is 250 and demand is 250, increasing equilibrium output by 30 units.

Refer to the Above Table