Consider the production possibilities frontier in the figure shown. As more and more cigars are produced the opportunity cost of producing more cigars:

Question

Quizplus · Accepted Answer

The production possibilities frontier is concave, indicating increasing opportunity costs. As more cigars are produced, the opportunity cost of producing additional cigars increases. Therefore, the best choice is to produce at the point where the marginal benefit of producing one more cigar is equal to the marginal cost of producing that cigar, which is at point D.

Consider the Production Possibilities Frontier in the Figure Shown