Answer to Question #189404 in Microeconomics for zain ul abdeen

Question

Why we have concave production possibility curve.explain detail.

Answer 1

Production Possibility Curve is convace to the origin because of the increasing opportunity cost. As we move down along the ppc to produce each additional unit of one good, more and more units of other good need to be sacrificed. That is,as we move down the along along the PPC,the opportunity cost increases. And this causes the curve shape of the production possibility Curve.