Final answer:
An increase in technology leads to higher supply and, after market adjustment, results in a higher output and lower prices, along with potential increases in employment due to a more optimistic outlook on the economy and innovative efficiencies such as 3-D printing.
Step-by-step explanation:
If technology increases, in the long run, businesses experience a reduction in production costs due to improvements in efficiency and productivity. This technological improvement leads to an increase in supply curves, as firms can produce more at a lower cost. As a result, existing firms will initially see higher profits, which attract new competitors into the market, increasing market supply further. Eventually, the market reaches a new equilibrium, where output is higher, and prices are lower than before the technological improvement, given the competitive nature of the market that drives profits back to zero.
Moreover, the adoption of new production technology, such as 3-D printing, which increases worker productivity, will have a combined effect of increasing the overall output and also potentially increasing employment, as more workers are needed to handle the additional output. Considering firms' optimism about the future, the increase in demand and production can push up the employment even further. However, due to higher supply, the price-level may decrease or remain stable, as there's more product available at a lower unit cost.