When all resources used in production are not perfectly substitutable,

Question

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The production possibilities frontier will be concave, or bowed outward, when all resources used in production are not perfectly substitutable. This means that as more of one good is produced, the opportunity cost of producing that good in terms of the other good will increase because resources cannot be easily shifted between the two goods. Thus, the economy or firm is limited in its ability to produce both goods efficiently and will reach a point where it cannot produce more of one good without sacrificing the production of the other. This results in a concave production possibilities frontier.

When All Resources Used in Production Are Not Perfectly Substitutable