Final answer:
A decrease in the average variable cost of producing wheat from $5 to $3 per bushel due to technological progress leads to a rightward shift of both the individual firm's and the market's supply curves, indicating increased supply at every price level.
Step-by-step explanation:
When the average variable cost of producing wheat in Canada decreases from $5 per bushel to $3 per bushel due to technological progress, the supply curve of both a typical competitive firm and all firms in the market will shift to the right. This shift indicates an increase in supply because firms can now produce the same quantity of wheat at a lower cost, allowing them to offer more wheat for sale at any given price.
The supply curve of a single firm would shift rightwards from its original position to represent the lower costs of production. Similarly, when looking at the market as a whole, the aggregate supply curve would also shift to the right, showing that at every price level, a greater quantity of wheat is supplied by all firms combined. The rightward shift of supply curves in a perfectly competitive market can lead to a reduction in market prices and an increase in the quantity of wheat sold, assuming demand remains constant.