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Questions
How does an improvement in production technology influence the supply curve of a firm?
What is the impact of the level of technology on supply?
Explain the effect of improved technology on the supply curve of a commodity.
Solution
Improvement in technique of production reduces the cost of production. Consequently, profits tend to increase, inducing an increase in supply and the supply curve shifts to the right.
Technological advancement → Cost ↓, → Profit ↑ → Supply ↑ → Rightward shift
RELATED QUESTIONS
What effect does increased input price have on the supply of a commodity? Draw a diagram in support of your answer.
In case of ______, supply curve is a vertical straight line parallel to the Y-axis.
What will the following cause
| Price in Rs. | Quantity supplied in Kgs. |
| 10 | 15 |
| 20 | 40 |
When a straight-line supply curve cuts the y-axis, the elasticity of supply will be ______.
Draw supply curve of the following situation:
Elasticity of supply = 0
The following diagram shows the supply curve of three commodities. Rank their price elasticity.
Study the graph and identify the supply curves S1 and S3 with respect to its time elements.
Define supply curve.
How does technological progress affect the supply curve of a firm?
Explain the following diagram.
