5) A technological improvement in apple production will: Increase the supply app

Question

5) A technological improvement in apple production will:

Increase the supply apples, raising the equilibrium price and quantity of apples.

Increase the supply of apples, lowering the equilibrium price and quantity of apples.

Increase the supply of apples, lowering the equilibrium price but raising the equilibrium quantity of apples.

Increase the demand for apples, lowering the equilibrium price but raising the equilibrium quantity of apples.

Increase the supply of apples, raising the equilibrium price but lowering the equilibrium quantity of apples.

Explanation / Answer

A technological improvement in apple production will Increase the supply of apples, lowering the equilibrium price but raising the equilibrium quantity of apples. Generally technological advances effect the supply curve, but other aspects of technology can also cause the demand curve to shift. The supply curve is always upward sloping left to right, with the demand curve downward sloping. The intersection of these curves indicate the equilibrium price point, or the price at which a supplier can offer goods and a consumer is willing to purchase them. Technology changes cause shifts along the supply and demand curves, which effectively moves the equilibrium price point up or down.The most prominent and sought-after effect of technological advancement is the ability to increase production. Advancements in production mean suppliers can produce more goods at a cheaper cost, thus pushing the supply curve outward from left to right on the x-axis. This effectively lowers the equilibrium price point, unless demand for the product increases, or shifts outward left to right, to meet the increased production levels at the current price point.

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