Final answer:
Moving production to a low-cost producer decreases manufacturing expenses, which is an effort to minimize costs when an input becomes more expensive or when leveraging technological improvements. These actions increase supply curves and can temporarily boost profits until market adjustments restore equilibrium.
Step-by-step explanation:
Moving production from a high-cost producer to a low-cost producer would decrease manufacturing expenses. This is because transferring production to a place where it costs less to produce the same goods will naturally reduce the total cost of manufacturing for a business. In this scenario, we assume that the change doesn't negatively impact other factors such as quality or logistics costs.
When firms face a situation where one production input becomes relatively more expensive, they typically look for ways to adjust their production technology or process so they can minimize costs. They might substitute the expensive input for a cheaper one, seek more efficient production methods, or move production to a location where the input is cheaper.
In the case of a technological improvement that lowers production costs, there will be an increase in the supply curves at both individual firm and market levels. This can lead to higher profits initially, but as new firms enter the market attracted by these profits, the increased market supply will eventually drive profits back down to normal levels.