Question

What is production possibility curve definition?

Answer 1

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A production possibility shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed. Opportunity Cost and the PPF. Reallocating scarce resources from one product to another involves an opportunity cost.

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Answer 2

Answer:

Production Possibility Curve (PPC) is an alternative combination of the production of two goods with the given level of resources and technology.

eg: If a company produces 20,000 watermelons and 1,20,000 pineapples. On the diagram, its point B.  If the production of oranges needs to be more, then the production of the apple should be lesser. On the graph, point C indicates that if it production of watermelons has to be 45,000, then the company can deliver only 85,000 pineapples. With this trade-off, the curve shows the idea of opportunity cost.