The shape of the production possibilities curve determines the combinations of current dividend,investment and future dividend that a company can achieve.

Question

Quizplus · Accepted Answer

The production possibilities curve shows the different combinations of goods and services that an economy can produce with its given resources and technology. In the case of a company, the production possibilities curve shows the different combinations of current dividend and investment that the company can achieve. The shape of the curve determines the trade-offs that the company faces between current dividend and investment.

The Shape of the Production Possibilities Curve Determines the Combinations