Currently, a company produces metal and wooden baseball bats at point C on the production possibilities curve. Recently, the cost of aluminum went down and the company invested in new machinery that would allow it produce more metal bats than before without reducing production of wooden bats. Which point represents the company's new production output?
The new point representing the company's new production output would lie outside the original production possibilities curve because it now has the ability to produce more metal bats without reducing the production of wooden bats.
If the company is now able to produce more metal bats without reducing production of wooden bats, it means that the company has experienced a technological improvement or an increase in efficiency for producing metal bats. This would shift the production possibilities curve outwards (to the right).
To determine the new production output point, we need to find a point on the curve that represents the increased production of metal bats while keeping the wooden bat production the same.
Since the company is now producing more metal bats, the new point would lie to the right of the current point C on the production possibilities curve.
Therefore, the company's new production output point would be represented by a point to the right of point C on the production possibilities curve.