Economics 9708 · AS & A Level · Production possibility curves

Production possibility curves — practice question

The diagrams concern industry X. P5 is the starting production possibility curve. Manufacturing techniques in industry X improve. Which changes occur?

  • Aaverage costs: ATC1 to ATC2; market for X: S3 to S4; new production possibility frontier: P7
  • Baverage costs: ATC1 to ATC2; market for X: S4 to S3; new production possibility frontier: P6
  • Caverage costs: ATC2 to ATC1; market for X: S3 to S4; new production possibility frontier: P6
  • Daverage costs: ATC2 to ATC1; market for X: S4 to S3; new production possibility frontier: P7

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