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28 August, 10:11

Suppose there is an improvement in the technology of producing TVs and the production of TVs is a competitive industry. Assuming that the TV industry is initially in equilibrium, the long-run effect of this improvement is: higher TV prices and lower TV production. lower TV prices and greater TV production. higher TV prices and greater TV production. lower TV prices and lower TV production.

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  1. 28 August, 11:01
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    lower TV prices and greater TV production.

    Explanation:

    Improvement in technology in an industry results in a faster production process, the output per unit time will increase. Supply of products in the market will go up.

    Since the market is a competitive one, an increase in amount supplied will result in excess goods pursuing scarce customers. This results in reduction of price of the product.

    So an improvement in technology of producing TVs will result in more TVs produced and prices will reduce.
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