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Saturday, 19 May 2018

Production Possibilities Curve

Production Possibility curve is a curve which shows maximum possibilities of quantity of two goods that can be produced if we use resource fully and efficiently. Technology by which economy is producing will remain constant.

PPC can shift forward if resources grow or technology upgrades.



Features of PPC:


Downward slopes


PPC is downward sloping curve from left to right. It slopes downward because to increase output of one good , output of another good is sacrificed.

Concavity

PPC is concave to the origin because MRT/MOC tends to rise.


Note: click here to read our post to know the reason of increasing MRT/MOC

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