A new technology is developed that makes mining for gold less costly. The result is _____ equilibrium price and _____ equilibrium quantity of gold.

Question

Quizplus · Accepted Answer

When the cost of mining for gold decreases, it becomes cheaper to produce gold, which increases the supply of gold in the market. As supply increases, the equilibrium price of gold decreases because there is more gold available. However, the lower price makes gold more affordable, leading to an increase in the quantity demanded. Therefore, the equilibrium quantity of gold increases.

A New Technology Is Developed That Makes Mining for Gold