If a firm experiences a significant reduction in its marginal cost due to technological advancements, what is the most likely outcome for its production levels in a perfectly competitive market?

When a firm in a perfectly competitive market experiences a significant reduction in its marginal cost due to new technology, it can produce goods more cheaply. This means the firm can either lower its prices to attract more customers or increase its production levels while maintaining the same price. As a result, the firm will likely choose to produce more because it can still make a profit at the market price. For example, if a bakery finds a way to bake bread more efficiently, it can make more loaves without raising prices, leading to increased sales and possibly higher profits. Overall, the firm’s ability to produce more at a lower cost will likely lead to increased production levels in the market.