Prior to 2019, Tesla operated only a single factory, located in Fremont, California. In 2019, the firm began constructing a second factory, located in Shanghai, China. According to an article in the Wall Street Journal, initially the plant will produce only Model 3 cars.
a. Draw a production possibilities frontier showing the trade-off Tesla faces between producing Model 3 cars and producing Model S and Model X cars before the factory in China begins production.
b. On the graph you drew in part (a), show the effect of Tesla’s factory in China starting production.