How does a production possibility chart assist in outlining opportunity cost?
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It compares production cost of one product to another. ... The chart assists by comparing profit potential of one product to the other
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Opportunity cost exists when producers choose to produce one product or service or another based on the resources they currently possess.
A production possibility chart shows the point at which goods are optimally produced in an economy based on the available resources. With this knowledge, governments are able to allocate resources effectively and choose products that offer them productive opportunity costs.
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