When technology increases the supply of a good and lower prices increase the quantity demanded,
A) the economy is reallocating resources to achieve an efficient allocation.
B) consumer surplus falls.
C) the invisible hand is unnecessary.
D) the marginal benefit of the good increases with the quantity produced.
E) the economy is no longer efficient because the quantity changes.

Question

Quizplus · Accepted Answer

When technology increases the supply of a good and lower prices increase the quantity demanded, it means that the economy is reallocating resources to achieve an efficient allocation. This process is known as the invisible hand, where the market forces of supply and demand guide the allocation of resources with minimal intervention from the government. As a result, consumers benefit from lower prices and higher quantities of the good, and producers benefit from increased profits. Therefore, choice A is the correct answer.

When Technology Increases the Supply of a Good and Lower