In an Edgeworth production box with isoquants,the contract curve reflects:
A)an efficient distribution of the output among consumers.
B)efficient input allocations across the firms.
C)all the points where competitive input markets could be in equilibrium.
D)all the points where the marginal rates of substitution between consumers are equal.

Question

Quizplus · Accepted Answer

The contract curve in an Edgeworth production box represents efficient input allocations across firms, where the marginal rates of technical substitution are equal for both firms, indicating no further gains from reallocating inputs.

In an Edgeworth Production Box with Isoquants,the Contract Curve Reflects