Suppose that a new technology, nuclear fusion, makes it much cheaper to generate power. Would this development cause a shift in the short-run aggregate supply curve (SRAS), the long-run aggregate supply curve (LRAS), both, or neither?

1. Only the LRAS Curve Shifts

2. Both curves shift

3. Only the SRAS curve shifts

4. Neither curve shifts

2. Both curves shift

Explanation:

In the presence of a new technology in an economic system, the supply and demand of goods and services will change. This is because the new technology will make the production and delivery of goods and services easier compared with the old technology. Therefore, in this problem, the correct option is option 3.

yes this will cause a shift in both curves.

Explanation:

because the short run aggregate supply curve will will shift due to the new price and the long-run aggregate supply curve will shift because of the new technology being introduced.

In the short-run, the aggregate supply is graphed as an upward sloping curve. The short-run aggregate supply curve is upward sloping because the quantity supplied increases when the price rises. In the short-run, firms have one fixed factor of production (usually capital).

The long-run aggregate supply curve is vertical which reflects economists' beliefs that changes in the aggregate demand only temporarily change the economy's total output. In the long-run, only capital, labor, and technology affect aggregate supply because everything in the economy is assumed to be used optimally.