How does technological progress affect the firms' supply curve?

The correct answer is Option (1) → Shift to the right.

Technological progress improves production efficiency, allowing firms to produce more output with the same amount of inputs or the same output at lower cost. As a result:

• Per-unit cost decreases

• Firms are willing and able to supply more at each price level

This causes the supply curve to shift rightward, indicating an increase in supply.