Production possibilities frontier (PPF)

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—producing more of one item means producing less of another. Points on the curve represent efficient use of resources, while points inside indicate underutilization, and points outside are unattainable with current resources. The PPF helps demonstrate opportunity cost and guides decision-making about resource allocation to achieve optimal production.