Question:medium

How does technological progress affect the firms' supply curve?

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Costs \downarrow or productivity \uparrow → supply right; costs \uparrow or disruptions → supply left.
Updated On: Apr 2, 2026
  • Shift to the right.
  • Shift to the left.
  • Remain at same place.
  • Shift in vertical shape.
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The Correct Option is A

Solution and Explanation

Step 1: Technology's Impact on Costs and Productivity.
Technological advancements increase productivity and/or decrease per-unit costs for a fixed amount of inputs.
Reduced costs at each output level means firms will supply more at any given market price.
Step 2: Supply Curve Adjustment.
With an increase in quantity supplied at every price, the entire supply curve shifts rightward (outward).
A leftward shift would signify increased costs or decreased capacity, contrary to the effects of technological progress.
Final Answer:\[\boxed{\text{Technological progress shifts the supply curve to the right.}}\]
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