Asked by
Chloe St. Clair
on Dec 10, 2024
Verified
Several producers in industry A developed an improved technology that reduces the quantity of resources used to produce a given output. Which of the following would be expected?
A) The per-unit costs of production of the firms adopting the technology would increase.
B) In the short run, economic profits would be earned by the earliest firms adopting the technology.
C) Product price would immediately fall to the minimum average total cost of the firms quickly adopting the technology, thus retarding the rate at which firms enter the industry.
D) Producers who adopt the technology will have short-run economic losses.
Economic Profits
The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of a firm beyond normal returns.
Quantity of Resources
The total amount of inputs available for the production process, including labor, capital, land, and raw materials.
- Examine how technological progress impacts market supply, price levels, and corporate earnings.
Verified Answer
BT
Learning Objectives
- Examine how technological progress impacts market supply, price levels, and corporate earnings.