As a Result of a Technology Advance in the Production

question 201

Multiple Choice

As a result of a technology advance in the production of your firm's product, you should anticipate a________ price for your product than the current equilibrium price and a _________ equilibrium quantity than the current equilibrium quantity.

• A)higher; higher
• B)higher; lower
• C)lower; higher
• D)lower; lower

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Definitions:

Break-Even Point

The level of production or sales at which total revenues equal total costs, resulting in zero profit.

Partial Moves

Actions or strategies that are implemented to a limited extent, often as a trial or preliminary step before full execution.

Margin of Safety

The difference between actual or projected sales and the break-even sales, indicating the risk cushion for not incurring losses.

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, indicating how much it contributes to covering fixed costs and generating profit.