Production possibility frontier:
A production possibility frontier (PPF) can also be known as the production possibility curve (PPC). PPF represents different alternative production possibilities of two commodities when resources are limited in an economy. Because of the limited resources available, it has to decide which goods to produce more or less.
Initially, the economy was operating on the 'HJ' production possibility frontier, which shifted in the outward direction to 'MN'. An outward shift of PPF is caused due to a change in one or many actors such as an increase in resource endowments, the betterment of technology, an increase in the factors of production like capital, labor, etc. When the factors of production increased then the economy's production capacity also increased. When there is a change in technology then the economy can produce goods with greater efficiency or with the use of a lesser amount of factors or resources.
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