production possibilities frontier

The production possibilities frontier (PPF) is a graph that shows the maximum possible output combinations of two goods or services that an economy can produce with its available resources and technology. It illustrates trade-offs, indicating that producing more of one good typically means producing less of the other due to limited resources. The shape of the curve reflects opportunity costs, and points on the curve represent efficient use of resources, while points inside the curve indicate underutilization. The PPF helps understand choices, efficiency, and opportunity costs in economic production.