Can a PP curve be a straight line?
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Answered by
8
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Can a PP curve be a straight line?
Theoretically it is possible. If we assume that the MRT is constant or the slope of PP curve is constant then it can take the shape of a straight line.
Moreover, MRT can be constant only in the situation when we assume that all the resources are equally efficient in production of all goods.
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suyaib:
hiii
Answered by
9
Heya....
PPC is the curve showing different possible combinations of two goods that can be produced at given resources ,,
Basically it is concave to the origin due to rise in MRT..
But as your question, theoretically it is possible that PP curve is straight line..
It is the case in which MRT is constant and the marginal loss is equal to marginal gain....
So, yes PP can be straight line..
PPC is the curve showing different possible combinations of two goods that can be produced at given resources ,,
Basically it is concave to the origin due to rise in MRT..
But as your question, theoretically it is possible that PP curve is straight line..
It is the case in which MRT is constant and the marginal loss is equal to marginal gain....
So, yes PP can be straight line..
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