Final answer:
An improvement in technology that reduces the cost of production will cause an increase in supply. This will result in a decrease in the equilibrium price and an increase in the equilibrium quantity.
Step-by-step explanation:
Assuming a downwards sloping demand curve, an improvement in production technology is predicted to lead to: c) An increase in quantity but decrease in price. An improvement in production technology typically leads to cost efficiencies, allowing producers to supply goods and services at a lower cost. As a result, the supply curve shifts to the right, indicating an increase in the quantity supplied. This increase in supply puts downward pressure on prices, leading to a decrease in the equilibrium price. Simultaneously, the increase in quantity supplied corresponds to a movement along the demand curve, reflecting an increase in the equilibrium quantity. Consumers benefit from the lower prices, and producers can supply a greater quantity due to improved production technology. Therefore, the correct prediction is an increase in quantity but a decrease in price, making option (c) the appropriate choice. This outcome aligns with the basic principles of supply and demand, illustrating how technological advancements can influence market dynamics.