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What is a bowed production possibility curve?

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Quick Answer

A bowed production possibility curve occurs when the opportunity cost of a good increases as more of the item is produced. The production possibility frontier (PPF) or production possibility curve occurs when the economy is the most efficient at producing goods and services and allocating resources in the best way possible.

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What is a bowed production possibility curve?
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Full Answer

The shape of the production possibilities curve can be defined with the law of increasing opportunity costs. When goods are produced in an economy, some of the resources will be more efficient at producing one item more than the other. The curve will be more concave when all of the resources are allocated most efficiently.

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