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The production possibility curve (PPC) is a two dimensional model, showing how resources can be used to produce two different goods or services or types of good and services.

The graph is bowed outwards due to a basic concept used in economics - the principle of increasing cost. If a producer were to produce more of one good or service, the constant in resources and technology would not be able to maintain the previous amount of production of the other good or service.

If more of one good or service is produced, the opportunity cost of the reduction of the other good or service increases, therefore the gradient of the curve increases.

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Q: Why does the production possibilities curve bow out from the origin?
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