If technology lowers production costs and shifts the Australian market's supply curve to the right, what happens to the equilibrium price and quantity?

• A. Equilibrium price rises and quantity falls.
• B. Equilibrium price falls and quantity falls.
• C. Equilibrium price falls and quantity rises.
• D. Equilibrium price rises and quantity rises.

Answer: (C)

When technology lowers production costs, the supply curve shifts to the right, meaning firms are willing to produce more at every price. With demand unchanged, the market clears at a new intersection that has a higher quantity and a lower price. So the equilibrium price falls and the equilibrium quantity rises. This reflects cheaper production making more of the good available while buyers keep buying at the lower price.