Read the following statements - Assertion (A) and Reason (R): Assertion: There is an upward shift of the MC curve after a technological innovation. Reasoning: To produce a given level of output, the organizational innovation allows the firm to use fewer units of inputs. From the given alternatives choose the correct one:

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A). Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A). Assertion (A) is true but Reason (R) is false. Assertion (A) is false but Reason (R) is true.

Assertion (A) is false but Reason (R) is true.

To produce a given level of output, the organizational innovation allows the firm to use fewer units of inputs. There is a rightward (or downward) shift of the MC curve after a technological innovation. Since supply curve is a part of MC curve, upward shift in MC curve would mean a decrease in supply and that costs have increased. But a technological innovation means reduction in costs and a subsequent increase in supply. This will be depicted by downward shift of MC curve or we can say rightward shift of supply curve.