Saturday, September 8, 2018

Production Possibility Curve with example

It is an alternative combination of production of two goods with the given resource and Technology

Assumption:
✓resources are given
✓Technology remain constant
✓alternative comparison between two goods

Real life example:
I am a wholeseller dealing with Kwality walls ice cream and Amul ice cream.Once in a months we used to buy 5000 kg of Rice and 2000 kg of Wheat. Later we realized that the Demand of Rice in market is not good as Wheat so I started the production of Wheat more that Rice.Here the shift of curve i.e. Rice is shifting left due to low consumption and Wheat is moving right due to high consumption from consumer.Hence this is the example of production possibility curve shifting right upon an alternative one.

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