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A new seed technology lets farmers grow twice as much wheat and rice per acre at the same cost as before. What effect does this technological improvement have on the supply curve for those crops?
AIt shifts the supply curve to the left
BIt has no effect on the supply curve
CIt shifts the supply curve to the right
DIt produces a movement along the supply curve
Answer & Solution
Correct answer: C. It shifts the supply curve to the right
1. New technology that lowers the cost of producing a given quantity is a supply determinant.
2. Lower costs at every output level let farmers profitably supply more at every price.
3. A curve showing a higher quantity supplied at every price has shifted to the right.
4. Option D is wrong because nothing about the crop's own price changed to cause a movement along the curve.
_Source: OpenStax Principles of Macroeconomics for AP Courses (CC BY 4.0), Ch 3 "Demand and Supply", section 3.2 | Shifts in Demand and Supply for Goods and Services_
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