Technical progress that leads to a reduction in costs results in?
Question 1 Report
Technical progress that leads to a reduction in costs results in?
Answer Details
When there is technical progress that leads to a reduction in costs, it becomes cheaper to produce the product. This means that companies can make more products at a lower cost. As a result, the supply of the product increases, and this puts downward pressure on the equilibrium price. At the same time, because the product is cheaper, more people are willing and able to buy it. This means that the demand for the product increases, putting upward pressure on the equilibrium quantity.
Therefore, the correct answer is: a decrease in equilibrium price and an increase in equilibrium quantity.
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