Suppose that there is an improvement in technology in the market for Samsung phones. 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 would lead to a decrease in production costs for Samsung phones, which would shift the supply curve to the right. This increase in supply would lead to a lower market clearing price, as Samsung would be able to produce more phones at a lower cost, and would want to sell them at a lower price to maximize profits. Therefore, answer option A is true.

Suppose That There Is an Improvement in Technology in the Market