The theory of the firm under perfect competition — Economics STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEconomicsThe theory of the firm under perfect competition1 Mark
Question
Explain the effect of cost saving technological progress on supply of a commodity.
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Answer
Technological improvement tends to lower the marginal and average costs of production because better technology facilitates higher output with the same inputs. Accordingly, producers are willing to supply more at the existing price.
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