Arrange the following steps that illustrate the impact of a technological breakthrough on a firm’s production costs and output level in a perfectly competitive market: A) The firm experiences a reduction in marginal cost due to the new technology. B) The firm increases its output level while maintaining its price. C) The firm's variable costs decrease as a result of the technological advancement. D) The market equilibrium reflects the new output levels and costs.

When a firm adopts a new technology, the first step is that the firm's variable costs decrease due to the technological advancement, which is step C. This reduction in costs leads to a decrease in marginal cost, which is step A. As a result of lower costs, the firm can increase its output level while keeping its price the same, which is step B. Finally, as more firms in the market adjust their production based on these changes, the market equilibrium reflects the new output levels and costs, completing the process in step D. For example, if a bakery uses a new oven that bakes faster and uses less energy, it can produce more bread for the same price, benefiting both the bakery and its customers.