When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm
A)experiences an increase in demand.
B)experiences positive technological change.
C)will hire more workers in order to produce more output.
D)is operating in the short run.

Question

Quizplus · Accepted Answer

When a firm produces more output using the same inputs or the same output using fewer inputs, it is experiencing positive technological change. This means that the firm has either improved its production process or implemented new technology to increase efficiency. This is different from an increase in demand, which would result in the firm producing more output due to increased customer demand. In the short run, the firm may not be able to hire more workers to produce more output due to constraints such as fixed capital or time.

When a Firm Produces More Output Using the Same Inputs