Question

What is the importance of the production possibility frontier?

Answer 1

In business analysis, the production possibility frontier (PPF) is a curve illustrating the different possible amounts that two separate goods may be produced when there is a fixed availability of a certain resource that both items require for their manufacture

production possibility frontier is used to illustrate the concepts of opportunity cost, trade-offs and also show the effects of economic growth. A country would require an increase in factor resources, an increase in the productivity or an improvement in technology to reach this combination.

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