How does market supply respond to an improvement in technology?

Lower costs per unit of output

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Higher costs per unit of output

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Extra costs per unit of output

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Output contracts

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Solution

The correct option is A
Lower costs per unit of output

Improvement in the production technique reduces the cost per unit of output. Hence, more of the commodity is supplied at its existing price.

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Improvement in the technology of production of a firm causes a supply curve to shift towards the ___

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