The invention of new technology that can double the amount of gold extracted from raw ore will lead to a
A)higher world price of gold, since mining companies must pay for the new machinery.
B)lower world price of gold, since any amount of gold output is now cheaper to produce.
C)higher world price of gold, because miners' wages must double as their productivity doubles.
D)lower world price of gold, but only if new mining companies are not allowed to enter the industry.

Question

Quizplus · Accepted Answer

With the invention of new technology that can double the amount of gold extracted from raw ore, it becomes cheaper to produce gold. As supply increases due to the increased efficiency, the price of gold will come down. This is because producers will be able to extract more gold at a lower cost and would have the ability to sell it at a lower price while still making a profit.

The Invention of New Technology That Can Double the Amount