Read the passage carefully and answer the question based on the passage:

Demand and Technology

Consider the case of a local coffee shop that faces rising demand for its products. In response to the increase in demand, the shop owner decided to increase the price of a cup of coffee. As a result, suppliers in the market respond by increasing their supply, hoping to capitalize on the higher price. If the coffee shop invests in a new espresso machine that makes coffee more efficiently, the cost of producing each cup decreases. This leads to an increase in supply and sell more coffee at the same or lower price, benefiting both the producers and consumers. This cost-reduction technology is helpful in the context of the real world.

In the above paragraph, which factor is affecting the supply of Coffee?

Advancement of technology.

The correct answer is Option (3) → Advancement of technology.

The passage explicitly states, "If the coffee shop invests in a new espresso machine that makes coffee more efficiently, the cost of producing each cup decreases. This leads to an increase in supply..." This direct link between the new espresso machine (a technological advancement) and the increase in supply highlights technology as the influencing factor. The other options are not mentioned as drivers of supply change in this specific scenario:

• Change in consumer's preference: This is a demand-side factor, not a supply-side factor, as described.

• Change in price of related goods: The passage does not discuss the price of related goods.

• Government policy: There is no mention of government policies affecting the coffee supply.