Production Possibilities Curve

Definition

The production possibilities curve (PPC), also known as the production possibilities frontier (PPF), is a graph that shows various combinations of two goods or services that can be produced by an economy, given its limited resources and technology.

Related terms

Scarcity: A condition where resources are limited compared to people's unlimited wants.

Opportunity Cost: The value of the next best alternative that must be given up when making a choice.

Efficiency: Producing goods and services using the fewest possible resources.