Explain, with the help of a diagram, the process through which the equilibrium price and equilibrium quantity of a good changes when there is an improvement in the technology underlying the production of that good.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [1] accurate diagram showing the demand and supply of a good
2. [1] with equilibrium market price and quantity
3. [1] explanation that an improvement in technology will shift the supply curve to the right
4. [1] because more can be produced at each price / the same quantity can be produced at lower costs/price
5. [1] accurate diagram showing a shift to the right of the supply curve
6. [1] and the resulting fall in equilibrium price and rise in equilibrium quantity
7. [2] explanation of the process that drives price down and quantity to rise to re-establish equilibrium
8. [4] explanation the general aims of supply-side policy and the specific aims of at least two supply-side measures
9. [4] explanation of the problems encountered in implementing supply-side policies
10. [3] evaluation assessing whether the problems can be overcome
11. [1] and a concluding comment