Average cost increases with accumulated production experience.

Question

Quizplus · Accepted Answer

This statement is actually a common misconception known as the "learning curve fallacy". In reality, the relationship between experience and cost is more complex and often depends on the specific situation. In some cases, costs may decrease with experience due to efficiencies gained, while in other cases costs may increase due to factors such as increased labor wages or materials costs. Therefore, the answer is B.

Average Cost Increases with Accumulated Production Experience