What happens in the market for canned cheese if a new automated filling machine makes production faster and cheaper?

• A. Demand shifts to the left  
• B. Demand shifts to the right  
• C. Supply shifts to the left  
• D. Supply shifts to the right

Answer: (D)

Verified step by step guidance

1. Identify the effect of the new automated filling machine on production costs and speed. Since the machine makes production faster and cheaper, it reduces the cost of producing canned cheese.
2. Understand how a reduction in production costs affects the supply curve. Lower production costs typically enable producers to supply more at every price level, causing the supply curve to shift.
3. Determine the direction of the supply curve shift. Because production becomes cheaper and faster, the supply curve shifts to the right, indicating an increase in supply.
4. Clarify that this change does not directly affect demand. Demand shifts occur due to changes in consumer preferences, income, or prices of related goods, which are not influenced by production technology.
5. Conclude that the correct market effect is a rightward shift in supply, leading to a higher quantity supplied at each price, potentially lowering the market price if demand remains constant.