A medical clinic employs 10 workers.Each worker can produce a maximum of either 2 units of medical services or 5 units of administrative services a day.The production possibilities frontier of this firm shows

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The production possibilities frontier of the firm will be a straight line because the opportunity cost of producing one unit of medical services is constant and the opportunity cost of producing one unit of administrative services is also constant. Therefore, the best choice will depend on the demand for each type of service and the prices that the clinic can charge for each service. If the prices are equal, then the clinic can produce any combination of medical and administrative services that lies on the production possibilities frontier.

A Medical Clinic Employs 10 Workers