How do changes in technology and production costs impact supply? Can you provide real world examples?

Changes in technology and production costs can have a significant impact on supply. When technology improves, it can lead to more efficient production processes, lower costs, and increased supply of goods and services. On the other hand, if production costs increase, it can lead to a decrease in supply as producers may not be able to produce as much at a profitable level.

One real-world example of how changes in technology impact supply is the introduction of automated machinery in manufacturing plants. By implementing advanced technology, companies can increase their production capacity and reduce labor costs, leading to an increase in supply of goods.

Another example is the impact of rising oil prices on supply. When the cost of oil increases, it can lead to higher production costs for industries that rely on oil as a key input, such as transportation and manufacturing. This can result in a decrease in supply as companies may not be able to afford to produce as much at higher costs.

Overall, changes in technology and production costs can have a significant impact on supply by influencing the efficiency and cost of production processes.