Question

New technology lowering the costs of production will cause the equilibrium price to ______________ and the equilibrium quantity to _____________.
a. decrease; increase
b. increase; increase
c. increase; decrease
d. decrease; decrease

Answer 1

Answer:

The answer would be A, Decrease, Increase.

Explanation:

New technology lowering the costs of production will cause the equilibrium price to decrease and the equilibrium quantity to increase.

New technologies are introduced in the organizations in order to do the tasks quickly and efficiently. With the introduction of new tech in the production process, if cost of production decreases, then the organization can make more profits with the same price and quantity. Also, the organization can lower the prices to attract more consumers. The equilibrium quantity also increases due to the introduction of advanced production technologies.

Answer 2

I believe the answer is A. decrease; increase
lowering the costs of production means that the company could still obtain the same amount of profit while reducing the price on the market.
Due to the development of technology, the production process will become more efficient, which lead to an increase of total quantity of the products on the market.