Shifts in Production Possibility curve



What causes a shift in production possibility curve

A right shift in the production possibility curve may be caused by an improvement in technology.

For example: The economy might have installed a new machinery which might have increased the production capacity.

 

A left shift in the production possibility curve may be caused by a reduction in resources or inefficiency.

For example: Steel was being used to produce the product, but now the supply of steel in the economy has reduced which has caused a reduction in overall production.






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