Introduction of new technology increases marginal product. How wo… - Vidyadip

Question

Introduction of new technology increases marginal product. How would it affect supply curve of a firm?

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Answer

Introduction of new technology increases MP (marginal product). It implies a fall in MC (marginal cost). Accordingly, supply curve of a firm shifts to the right which shows that the producers are now willing to offer more quantity of a commodity at its existing price.

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