The efficiency frontier is not static; it is continually being pushed outwards by the efforts of managers to improve their firm's performance through innovation.

Question

Quizplus · Accepted Answer

The efficiency frontier represents the maximum output a firm can achieve given a set of inputs and technology. However, through innovation and continuous improvement efforts, managers can increase the efficiency of their firms and push the efficiency frontier outwards. Therefore, the efficiency frontier is not static, but rather dynamic and subject to change.

The Efficiency Frontier Is Not Static; It Is Continually Being