why is ppc also called as opportunity cost
Answers
Answered by
28
In ppc to produce more of one commodity we have to sacrifice some units of other commodities.
Also opportunity cost is the cost of next best alternative sacrificed.
That's why ppc curve also called opportunity cost curve.
Answered by
4
PPC show tradeoff between two best alternatives is the reason why ppc are also called as oppurtunity cost.
Explanation:
PPC (Production Possibility Curve) is also called opportunity cost curve. PPC resembles combination of goods and services which is produced with optimum utilization of the resources by available production capacity. It shows opportunity cost of X with a reference of Y.
Product possibility curve is flat at the end curved shape in the middle of the arc. PPC models show tradeoffs between two products. Production possibility curve show the concept of scarcity and next best alternative.
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