Choco Fantasy is a firm that produces both dark chocolates as well as liquor chocolates. It can produce 10,000 bars of dark chocolate per month if all its resources are used to produce only this variety. Similarly, using all its resources in the production of liquor chocolates, the firm can produce 8,000 bars per month. However, during a given month, the firm produces both varieties.
Which of the following, if true, would suggest that the firm is operating on its PPF?
A. Medical reports earlier this year indicated that higher chocolate consumption increases the risk of heart attack.
B. Even though the demand for both liquor and dark chocolates has increased, the company can increase the production of only one variety.
C. Most domestic consumers prefer the better quality Swiss chocolates imported by the country.
D. In an attempt to cut costs, the company is planning to fire its unproductive resources.
E. The opportunity cost of shifting resources from the production of liquor chocolates to dark chocolates is marginal.