An increase in productivity as a result of a new technology would cause the production possibilities frontier to shift outward.
<h3>What is the production possibilities frontier?</h3>
The production possibilities frontier is a graph that depicts the various combination of two goods a company can produce when all its resources are fully utilised. The production possibilities frontier is concave to the origin. This reflects the opportunity cost involved in production.
Factors that cause the production possibilities frontier to shift outward include:
Explanation: The rationing function of price describes the way in which the use of price is done for rationing of several scarce resource. This is done automatically by the market forces of demand and supply as when the demand for a commodity exceeds its supply the price of the commodity rises leading to decrease in demand.
Thus, rationing function states to ration the goods and distribute them carefully and not to distribute the surplus amount.
Answer: All competitive advantages do not accrue to large-sized firms. A major advantage of smaller firms are that they "(B) can launch competitive actions more quickly."
Explanation: Smaller companies can launch competitive actions faster because being smaller, communication is much faster, and decision-making involves fewer interested people who may differ in opinions to direct competitive strategies.
