What is Production Possibility Curve?

What is Production Possibility Curve?

Production Possibility Curve shows the different combinations of two products which can be produced with the given resources.  It also depicts the maximum output which can be achieved with the existing resources. If resources are shifted from one product to another there would be a change in production for both the products.

Scenario:

A company can produce both bats and ball. The company is currently producing 10 bats and 100 balls, if the company decides to shift more of its resources to balls it could be able to produce 150 balls but as a result of this decision there would be a decrease in the number of bats being produced by the company.