Explain why the Production possibility curve for an economy is concave to the origin with a diagram
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Why is PPC curve concave to the origin?
The slope of the production–possibility frontier (PPF) at any given point is called the marginal rate of transformation (MRT). ... The shape of a PPF is commonly drawn as concave to the origin to represent increasing opportunity cost with increased output of a good.
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PPF is concave to origin because of the increasing marginal opportunity costs. That is more and more units of one commodity are sacrificed to gain an additional unit of another commodity. Due to this increasing marginal cost, PPF becomes more and more steep, thus the curve bends outwards and becomes concave to origin.
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