Suppose that there is an improvement in technology in the market for iPhones. Which of the following is true?
A) Supply will increase and the market clearing price will fall.
B) Supply will increase and the market clearing price will rise.
C) Demand will increase and the market clearing price will rise.
D) Demand will increase and the market clearing price will fall.

Question

Quizplus · Accepted Answer

An improvement in technology in the market for iPhones would lead to an increase in the supply of iPhones as producers are able to produce them more efficiently. This increase in supply would lead to a fall in the market clearing price as there would be a greater quantity of iPhones supplied at each price level. Therefore, choice A is the correct answer.

Suppose That There Is an Improvement in Technology in the Market