
Figure 15.9 A Production Edgeworth Box
An Edgeworth box can be used to determine the efficient input allocation between two firms. In this case, Cereal, Inc.’s and Pancake, Inc.’s labor inputs are on the horizontal axes and their capital inputs are shown on the vertical axes.
QC1,
QC2, and
QC3 are examples of Cereal, Inc.’s isoquants, and
QP1,
QP2, and
QP3 are examples of Pancake, Inc.’s isoquants.