Which statement best describes the impact of technological advancement on supply in Australia?

Which statement best describes the impact of technological advancement on supply in Australia?

• A. It raises production costs and reduces supply.
• B. It lowers production costs and increases supply; example: automation in Australian manufacturing or mining.
• C. It has no effect on supply; only demand is affected.
• D. It increases the price level but doesn't change quantity supplied.

Answer: (B)

Technological advancement lowers production costs and increases productive capacity, which shifts the supply curve to the right. In Australia, automation in manufacturing or mining reduces the cost of making goods and allows firms to produce more at each price, so overall supply rises. As a result, at any given price, more is supplied, and the market price may fall if demand stays the same due to the larger quantity available. The other statements don’t fit because higher production costs would reduce supply, not increase it; technology typically makes production cheaper, not more expensive. Saying technology has no effect on supply ignores the efficiency and output gains that come with automation. Finally, tech raising the price level without changing quantity supplied contradicts the idea that cheaper production enables more to be produced; an increased supply usually puts downward pressure on price rather than lifting it while leaving quantity unchanged.

Technological advancement lowers production costs and increases productive capacity, which shifts the supply curve to the right. In Australia, automation in manufacturing or mining reduces the cost of making goods and allows firms to produce more at each price, so overall supply rises. As a result, at any given price, more is supplied, and the market price may fall if demand stays the same due to the larger quantity available.

The other statements don’t fit because higher production costs would reduce supply, not increase it; technology typically makes production cheaper, not more expensive. Saying technology has no effect on supply ignores the efficiency and output gains that come with automation. Finally, tech raising the price level without changing quantity supplied contradicts the idea that cheaper production enables more to be produced; an increased supply usually puts downward pressure on price rather than lifting it while leaving quantity unchanged.