Refer to the table below.
If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price,the new equilibrium price would be:

Question

Refer to the table below. 
If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price,the new equilibrium price would be:

Quizplus · Accepted Answer

According to the table, at a price of $12, the original quantity supplied was 140. If production costs decrease and quantity supplied increases by 60 units at each price, the new quantity supplied at a price of $12 would be 200. At this new quantity supplied, the market would be in a state of excess supply and price would decrease. Therefore, the new equilibrium price would be lower than $12. Looking at the options, the only choice lower than $12 is $11. Therefore, the best choice is B) $12.

Refer to the Table Below