The Production Possibility Frontier

The Production Possibility Frontier (PPF) is a graph that shows the maximum possible output combinations of two goods or services an economy can produce using its available resources and technology efficiently. It illustrates the trade-offs involved—producing more of one good generally means producing less of the other. 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 to understand opportunity cost and the choices nations face when allocating resources.