Explain why the opportunity cost changes at every level of p

Explain why the opportunity cost changes at every level of production?

Solution

The opportunity cost changes at every level of production because the resources are completely adaptable to alternative uses. Since, when the level of production changes, the composition of each good changes in the product matrix, the amount of resources that are used also changes. Now as the resources are not completely flexible with regard to its usage in different products, the opportunity cost changes at every level of pro