Modeling Technological Improvement as a Rightward and Downward Shift in the Supply Curve
A shift in the supply curve can be modeled by altering a parameter, such as 'c', which represents the state of technology in the supply function. An improvement in technology, corresponding to an increase in 'c', lowers the marginal cost of production. This reduction in costs means that firms are willing to supply a larger quantity at any given price, which is depicted graphically as a rightward shift of the supply curve. [1, 2, 3, 4] Since the supply curve reflects the marginal cost curve, this rightward shift is equivalent to a downward shift, a concept illustrated in Figure 8.15. [6, 7, 8]
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Introduction to Microeconomics Course
CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
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