Consider the short-run and long-run cost curves for a firm.If there is an improvement in the firm's technology,
A)the firm will move to a lower point on both its long-run and short-run average cost curves.
B)the firm will move to a lower point on its long-run average cost curve only.
C)both the long-run and short-run average cost curves will shift downward.
D)there will be a downward shift in the long-run average cost curve but not in the short-run average cost curve.
E)there will be no change in the cost curves in the long run.

Question

Quizplus · Accepted Answer

An improvement in technology typically reduces production costs, causing both the long-run and short-run average cost curves to shift downward.

Consider the Short-Run and Long-Run Cost Curves for a Firm