PRODUCTION POSSIBILITIES CURVE: A curve that illustrates the production possibilities for the economy. A production possibilities curve (or PPC), like the one presented here, represents the boundary or frontier of the economy's production capabilities. That's why it's also frequently termed a production possibilities frontier (or PPF). As a frontier, it is the maximum production possible given existing (fixed) resources and technology. Producing on the curve means resources are fully employed, while producing inside the curve means resources are unemployed. The law of increasing opportunity cost is what gives the curve its distinctive convex shape.

     See also | production possibilities | production possibilities schedule | resources | technology | full employment | unemployment | opportunity cost | economic growth | law of increasing opportunity cost | scarcity | convex |

PRODUCTION POSSIBILITIES CURVE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: October 20, 2018].

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Total cost per unit of output, found by dividing total cost by the quantity of output. When compared with price (per unit revenue), average total cost (ATC) indicates the per unit profitability of a profit-maximizing firm. Average total cost is one of three average cost concepts important to short-run production analysis. The other two are average fixed cost and average variable cost. A related concept is marginal cost.

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