If other factors remain unchanged, technological progress in producing good A definitely will lead to
A) an increase in the market clearing price of good A and a decrease in the equilibrium quantity of good A.
B) an increase in both the market clearing price and the equilibrium quantity of good A.
C) a decrease in the market clearing price of good A and an increase in the equilibrium quantity of good A.
D) a decrease in both the market clearing price and the equilibrium quantity of good A.

Question

Quizplus · Accepted Answer

Technological progress in producing a good typically increases production efficiency, leading to a lower cost per unit. This generally results in a decrease in the market clearing price due to the lower costs and an increase in the equilibrium quantity as consumers buy more of the cheaper good.

If Other Factors Remain Unchanged, Technological Progress in Producing Good