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Figure: Production Possibilities and Circular-Flow Diagram
-(Figure: Production Possibilities and Circular-Flow Diagram) Look at the figure Production Possibilities and Circular-Flow Diagram. Assume the two figures represent the same economy. Suppose that in the circular-flow diagram capital that used to flow to firms producing coconuts now flows to firms producing fish. This adjustment in the economy would be best represented in the production possibilities figure by a move from point A toward:
Monopolistic Competition
A market configuration where numerous companies offer products that are alike but not the same, resulting in competitiveness centered on aspects other than price.
Pure Competition
A market structure characterized by an extremely large number of sellers, none of which can influence market price or terms for exchange.
Industry
A group of companies and organizations involved in the production, processing, and distribution of goods and services in a particular sector of the economy.
Marginal Costs
The amplification of total charges incurred from producing an incremental unit of a product or service.
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