aluminum substitutes for steel in a process of change that makes a
statistical category such as “primary metals” seem unsatisfactory. Even for
a given category such as steel, today’s product is lighter, stronger, and
more flexible than the “same” product manufactured only 20 years ago.
Furthermore, the modern “materials revolution” allows new materials to
be tailor-made for the specific purposes for which they are required.
The invention of new production techniques and the development of new and better inputs
are important aspects of technological improvement. They lead to reductions in firms’ costs
and a downward shift in LRAC curves.New technologies and improved inputs are key aspects of technological
change, and they are both reasons that firms’ LRAC curves shift
downward over time. A third aspect is not directly related to costs but
rather to the new products that are invented as a result of technological
change.
Environmental concerns combined with increases in the world price of oil
have led to the development of hybrid and fully electric cars.
Kevin Diertsch/UPI/Newscom