If a Technological Advance Lowers a Firm's Production Costs, Why

question 208

Essay

If a technological advance lowers a firm's production costs, why do prices typically fall? Shouldn't the firm maintain the same price and earn economic profit?

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Definitions:

RU-486

A synthetic steroid used medically to induce abortion by blocking the action of progesterone.

Cis-trans Isomers

Stereoisomers that differ in the spatial arrangement of groups relative to a double bond, ring, or other structure leading to different physical and chemical properties.

Constitutional Isomers

Molecules that share the same molecular formula but differ in the connectivity of their atoms, leading to different structural forms.

Isomeric

Describes molecules that have the same molecular formula but different arrangements of atoms, resulting in different properties.