The Development of a New Production Technique That Lowers the Cost

question 104

True/False

The development of a new production technique that lowers the cost of producing 3-D movies will shift the supply curve of 3-D movies to the right.

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Definitions:

Marginal Cost

The expenditure required to create one more unit of a product.

Producer Surplus

The difference between the amount that producers are willing and able to sell a product for and the actual amount they do sell it for.

Demand Curve

A visual plot that illustrates the connection between the cost of a product and the amount of it buyers are prepared and capable of buying at different price levels.

Supply Curve

A visual chart that illustrates how the price of a product correlates with the amount of the product that sellers are prepared to offer.