What happens when a firm experiences a positive technological change?
A)The price of a share of the firm's stock rises.
B)The firm is able to produce more output using the same inputs, or the same output using fewer inputs.
C)The value of the firm's assets rises.
D)The firm will hire additional workers in order to increase production.

Question

Quizplus · Accepted Answer

A positive technological change allows a firm to produce more output using the same inputs, or the same output using fewer inputs. This can increase the firm's efficiency and profitability. It may also result in lower costs, which could result in lower prices for consumers and increased demand for the firm's products or services. While increased profitability can lead to a rise in stock price, this is not always guaranteed. The value of the firm's assets may also rise, but this depends on the specifics of the technological change and the assets in question. The firm may or may not hire additional workers, depending on the extent to which the technological change can be automated or otherwise managed by existing workers.

What Happens When a Firm Experiences a Positive Technological Change