What is the impact of technological advances on a market?

Technological advances now mean that firms are able to produce more. This then increases supply, shifting the supply curve on the supply and demand diagram outward (to the right). As a result of this, market equilibrium also shifts to the right. This cause a decrease in prices, as supply has increased so consumers now have more choice in the market and can choose to purchase from cheaper firms. Furthermore, quantity demanded increases, as there is now more supply and the good/service is now cheaper.

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Answered by Jessica W. Economics tutor

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