Merck, a pharmaceutical company, has taken thousands of drugs through the federal approval process and so can do it more cost efficiently than many competitors who are new to the industry. These cost savings that come to Merck in the drug approval process are an example of

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Learning effects refer to the cost advantages that a firm gains from experience and practice over time, leading to more efficient processes. Merck's experience in taking drugs through the approval process allows it to do so more cost-efficiently than newer competitors, exemplifying learning effects.

Merck, a Pharmaceutical Company, Has Taken Thousands of Drugs Through