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How does a production possibility chart assist in outlining opportunity cost?

User SMshrimant
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The production possibility chart/frontier assist in outlining opportunity cost as it compares the production cost of one product to another. The purpose of this curve/chart/frontier is to show the different combinations/mixture of two goods that are produced by the given resources.

Assumptions of production possibility frontier;

1. A certain amount of resources is given.

2. Full and efficient use of available resources has been done.

3. Change in technique.

User Kfrosty
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