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Production capabilities and prices

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Reference no: EM131434125

Explain the producer's problem using as much detail as possible. Your answer should include an explanation of the problem itself, how they solve it graphically, how price changes affect production decisions, and why prices provide incentives for producers. Use both straight line (individual) and bowed out (societal) PPFs to illustrate the idea. Feel free to incorporate graphs, drawings, and diagrams relevant to the problem. Use made up production capabilities and prices if you wish, too.

Reference no: EM131434125

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