Question

If a technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price, the new equilibrium price would be

Answer 1

Answer:

$12

Explanation:

Please find attached the table used in answering this question

Equilibrium price is the price at which quantity demand equal quantity supplied. Above equilibrium price there is a surplus - quantity supplied exceeds quantity demanded.

Below equilibrium price there is a shortage - quantity demanded exceeds quantity supplied

When 60 is added to 190, it becomes 250. here quantity supplied equal quantity demanded. Thus, the equilibrium price is $12

When 60 is added to 100, it becomes 160. this is less than 295.At a price of $10, there is a shortage

When 60 is added to 265, it becomes 325. this is greater than quantity demanded - 135. at the price of $15, there is a surplus