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Because of increasing MRS (marginal rate of substitution)

Economics May 27, 2021

Because of increasing MRS (marginal rate of substitution).

As more unit of good 1 is produced,there will be a decrease in the production of good 2(This is the theory of MRS). Only when MRS/MOC is constant, will the ppc be a straight line. In an economy (usually) there will be some MRS when producing two goods because of scarcity.

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