Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:
A firm producing electric vehicles, discovers a cheaper and more reliable source of battery power for its vehicles. How will the supply curve of the firm react to this development?
Options:
Supply curve will experience rightward shift
Supply curve will experience leftward shift
Supply curve will experience downward movement
Supply curve will experience upward movement
Correct Answer:
Supply curve will experience rightward shift
Explanation:
New technology makes product cheaper and better, encouraging producers.