Give the assumptions taken for PPC market.
Solution:
The production possibility curve is based on assumptions as the market keeps changing constantly.
Assumption 1:- According to the production possibility curve, the economy is assumed to have only two goods which represent the entire market.
Assumption 2:- The supply of resources to the economy is assumed to be fixed or stay constant.
Assumption 3:- The technology or the techniques of production are assumed to be constant.
Assumption 4:- The production possibility curve assumes that all the resources are used efficiently and fully. But in reality, these are not used or utilised entirely.
