PSAT Math Multiple-Choice Question 627: Answer and Explanation

Question: 627

If the manufacturer of the XYZ machine develops new technology that makes creating the machine less expensive, in which zone(s) of the graph would the new supply curve most likely be?

• A. 1 and 2
• B. 2 and 3
• C. 3 and 4
• D. Unchanged

Correct Answer: C

Explanation:

(C) If creating the machine is now less expensive, the manufacturer can afford to make more machines for a given price. Therefore for each price, the quantity will be higher. Thus, the supply curve should shift to the right, shifting it into zones 3 and 4, which is choice (C).