The production contract curve
A) Shows every efficient allocation of inputs between two firms in an Edgeworth box
B) Shows every efficient allocation of consumption goods in an Edgeworth box
C) Passes through the tangencies between pairs of isocosts in an Edgeworth box
D) Shows every inefficient allocation of inputs between two firms in an Edgeworth box

Question

Quizplus · Accepted Answer

The production contract curve represents all the efficient allocations of inputs between two firms in an Edgeworth box, where the firms' isoquants are tangent, indicating no further gains from reallocating inputs.

The Production Contract Curve