If a more efficient technology was discovered by a firm, there would be:

an upward shift in the AVC curve

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a downward shift in the AFC curve

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an upward shift in the AFC curve

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a downward shift in the MC curve

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Solution

The correct option is D
a downward shift in the MC curve

New technology will reduce the cost of labour per additional unit of output due to increase in efficiency, resulting to downward shift of MC curve.

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When there is a mutual exchange of technology or knowledge between two firms, it is called ___

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