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why is a production possibility curve concave ? explain
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why is a production possibility curve concave ? explain
Production Possibility Curve is concave to the origin because to produce each additional unit of good X, more and more unit of good Y is to be sacrificed. Opportunity cost of producing every additional unit of good A tends to increase in terms of the loss of production of good Y. It is so because factors of production are not perfect substitute of each other.
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why is a production possibility curve concave ? explain
Due to increasing marginal rate of substitution
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why is a production possibility curve concave ? explain
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