What is one effect of a technological improvement in a production process?

A technological improvement in a production process typically enhances efficiency, allowing producers to create more output with the same amount of inputs or the same output with fewer inputs. This is because technological advancements often lead to better methods of production, utilization of resources, and overall productivity.

When a firm can produce a given level of output with fewer inputs due to improved technology, it not only lowers production costs but may also enable the firm to allocate resources more effectively, investing in other areas of the business or improving the quality of its products. This aspect of reducing input requirements while maintaining or enhancing output reflects the fundamental purpose and value of technological advancements in production.

In contrast, an increase in total variable costs would typically arise from increased production or input utilization, and not necessarily from improvements in production technology. A reduction in the amount of output possible with a fixed input contradicts the very essence of technological improvements, which tend to boost efficiency rather than diminish potential output. Finally, average total costs are generally expected to decrease with improvements in technology due to efficiency gains, rather than remaining unchanged. Hence, the correct choice highlights the positive impact that technological advancements can have on production efficiency.