Question

Currently, a company produces metal and wooden baseball bats at point C on the production possibilities curve. Recently, the cost of aluminum went down and the company invested in new machinery that would allow it produce more metal bats than before without reducing production of wooden bats. Which point represents the company's new production output?

Answer 1

The new point representing the company's new production output would lie outside the original production possibilities curve because it now has the ability to produce more metal bats without reducing the production of wooden bats.