If there is an improvement in production technology used by the given firm, the cost of production will decline and consequently the firm would supply more than before at the given price. This can be proven with the help of the diagram given below.

In the given diagram, we show the price of the given good X (P_x) on the OY axis and the supply of the good X (S_x) on the OX axis. SS' denotes the original supply curve. At the given price OP initially OQ amount of the given good was supplied. But now because of the improvement in production technology, the CoP declines and consequently the firm will now supply more than before at the given price, i.e., supply of the given good will increase, implying that the supply curve will shift to the right from SS' to S₁S1. Now at the given price OP, due to the improvement in production technology, OQ₁ amount of the given good will be supplied which is greater than the initial amount OQ by the distance QQ₁ (OQ₁ - OQ).

(a) The feature 'large number of buyers and sellers' in a perfectly competitive market implies that each individual buyer and seller is very small entity compared to the size of the market. In other words, no individual buyer or seller can influence the market by their size.
(b) The condition 'entry into the market as well as exit from the market are free for firms' is essential. for the large number of firms to exist.