Question

Technological advancement leads to cost saving.

Answer 1

Technological advancement refers to improvements in production methods, machinery, software, or processes that make it easier, faster, or more efficient to produce goods and services.

1. Increased Efficiency: Advanced technology allows a firm to produce more output with the same or fewer inputs. Example: Automation reduces the need for labour.
2. Reduction in Wastage: Modern machines and techniques reduce raw material wastage, which lowers the cost per unit.
3. Faster Production Time: Advanced machinery and digital systems help complete tasks quickly, lowering the time-related costs (e.g., electricity, rent, and salaries).
4. Lower Labour Costs: Technology like AI and robotics reduces dependence on human labour, cutting wages and training expenses.
5. Economies of Scale: Technological advancement enables mass production, which brings down average cost as output increases.