Final answer:
Technological advances that reduce variable resource costs lead to lower production costs, higher profits, and increased market supply until competition equalizes profits again.
Step-by-step explanation:
If a technological advance reduces the amount of variable resources needed to produce any level of output, then the firm's cost of production will decrease. This can lead to an increase in the supply curve, both by individual firms and at the market level. Firms will experience higher profits temporarily, which will attract new firms into the market. However, this entry of new firms will continue until the market supply has increased sufficiently so that profits are normalized back to zero, restoring the competition in the market. Additionally, if one input becomes more expensive, firms may shift their production technology to use less of the expensive input and more of a cheaper one.