The conversation between human and AI assistant.
Under what circumstances would the production possibility curve be bowed in towards the original and are these circumstances likely?
Can you explain to me under what circumstances the production possibility curve would be bowed in towards the original?
Sure, the production possibility curve is usually bowed outwards, which indicates increasing opportunity cost. However, it can be bowed inwards when there are increasing returns to scale. In other words, as more resources are added to production, the output increases at an increasing rate.