Get Started
Start Free Mocks
CUETMOCK

Ace Your

CUET Preparation Today

Start Free Mocks
Home Questions TEVQWXKXZ9
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Firms under Perfect Competition

Question:

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:

Options:

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.

Correct Answer:

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

Explanation:

The correct answer is Option 4: Assertion (A) is false but Reason (R) is true.

Assertion: There is an upward shift of the MC curve after a technological innovation. False.

 

  • Technological innovation improves efficiency, allowing firms to produce the same output with fewer inputs.
  • This lowers marginal cost (MC) because the firm incurs less cost per additional unit produced.
  • Thus, instead of shifting upward, the MC curve shifts downward (rightward) after technological improvement.

Reasoning: To produce a given level of output, the organizational innovation allows the firm to use fewer units of inputs. True. Innovation improves production efficiency, meaning firms require fewer inputs to produce the same amount of output. This reduces production costs, which aligns with economic principles.

CUET Questions