Economics · Market Structures & Supply
In a perfectly competitive market, what is the immediate effect of a technological advancement that significantly reduces the marginal cost of production for all firms?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An upward shift of the demand curve to match the increased production capacity
- 2A rightward shift of the supply curve leading to a lower equilibrium price and higher quantity✓
- 3A leftward shift of the supply curve leading to a higher equilibrium price and lower quantity
- 4A movement along the existing supply curve towards a higher price and lower quantity
Correct answer
A rightward shift of the supply curve leading to a lower equilibrium price and higher quantity
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