Production Possibility Curve (2)

ProductionProduction possibility curve is a curve which depicts all attainable mixtures of two items which an economic system can produce with available technology and with full and efficient use of its given resources.

When economic system is producing on PP curve each point on it like A, B, C, D, E and F reflects situation of full and efficient employment of sources. This means resources like labour, land , capital and so forth are not idle. A production chance curve reveals the potential of an economic system in which full utilization of resources like Land, Labour, capital and expertise can be employed.

The point A the place the full product stops growing at an growing fee and starts growing at a diminishing fee is called the point of inflexion. This is the point at which the curvature of the TP curve modifications. It is right here that diminishing returns set …