Consider the production functions shown here, which show the output of a bakery over time. Suppose that the bakery experiences significant wear and tear of its ovens and that this leads some of the ovens to break down. Which of the movements reflects this scenario?

Question

Quizplus · Accepted Answer

The movement from D to C reflects the scenario where some of the ovens break down and the bakery's production output decreases. This is because the production function shifts downward from the initial output level shown at point D to the lower output level shown at point C.

Consider the Production Functions Shown Here, Which Show the Output