When a new technology lowers production costs, what is the expected effect on the supply curve?

When a new technology is introduced that lowers production costs, businesses are able to produce products more efficiently and at a lower expense. This improvement typically increases the quantity of goods that suppliers are willing to produce at any given price. As a result, the supply curve shifts to the right, reflecting the increased supply in the market.

A rightward shift indicates that for any given price, suppliers are now able to provide more goods than before due to the cost-saving effects of the new technology. This can lead to a lower equilibrium price and a higher quantity of goods sold in the market, benefiting consumers and driving competition among producers.

In contrast, a shift to the left would indicate a decrease in supply, a steeper curve could suggest that the cost of production has increased relative to output, and no change to the supply curve would imply that production costs and the ability to supply have remained constant. Therefore, the correct understanding of how technological advancements impact the supply curve lies in recognizing the relationship between production costs and supply efficiency.