Digital PSAT Math Practice Question 77: Answer and Explanation

Question: 77

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).