Graphically,what is the effect of technological change?
A)The long-run average cost curve will shift down,but the short-run curves will not change.
B)Both the long-run and short-run average cost curves will shift down.
C)The long-run average cost curve will shift up,but the short-run curves will not change.
D)Both the long-run and short-run average cost curves will shift up.
E)It will reduce the size of the average firm.

Question

Quizplus · Accepted Answer

Technological change leads to improved efficiency and productivity, which reduces costs for firms. This shift in cost structure affects both the short-run and long-run average cost curves, causing them to shift downwards. Therefore, option B is the best choice as it correctly describes the graphical effect of technological change on a firm's cost structure.

Graphically,what Is the Effect of Technological Change