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Q. The three techniques produce 5 bars of soap ($15-$3 every bar X 5 bars)
1. Illustrate what technique will you utilize if price of soap falls to $2.75? to $4? to $5?
2. Elucidate how many bars of soap will you want to produce if price falls to $2?
3. Assume price of soap is again $3 every bar, but prices of all 4 resources are now $1 every unit. Which is now the least-profitable technique?
4. If the resource prices return to original levels, but a new technique is invented that can produce 3 bars of soap (not 5), using 1 unit of each of the four resources, will industries prefer the new technique?
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