Process innovation can be depicted as
A) an upward shift in a firm's total product curve.
B) an upward shift in a firm's marginal cost curve.
C) a downward shift in a firm's marginal revenue curve.
D) an increase in product demand.

Question

Quizplus · Accepted Answer

Process innovation leads to an upward shift in a firm's total product curve because it allows the firm to produce more output with the same inputs or the same output with fewer inputs. This is achieved through improvements in production technology, equipment, or organization of the production process. It results in higher productivity and efficiency, which translates to a larger total product at every level of input. B, C, and D are not correct because they do not describe the effect of process innovation on a firm's cost, revenue, or demand curves.

Process Innovation Can Be Depicted as