Question

Utility companies can use a mix of plants different energy sources to produce electricity, mainly these are coal fired plants but increasingly they relying on gas turbines. Technological improvements in hydraulic fracturing, or “fracking,” have decreased the cost of extracting smaller pockets of natural gas. What affect does fracking have on supply and demand for coal?

Answer 1

Technological improvement in extraction of coal has advanced and this means the cost per extraction per unit of coal is reduced as a result of this, the supply of coal increased because at the same budget you can extract more coal and with this supply curve shift right as shown in the figure and this reduces the equilibrium price and increases Equilibrium Quantity on the whole.

However technological improvement is just an input factor and therefore it doesn't effect the demand for coal.