Two firms of the same size may have significantly different operating costs because one has progressed farther down the learning curve.

Question

Quizplus · Accepted Answer

The learning curve refers to the phenomenon where the more a company produces, the more efficient it becomes, resulting in lower costs per unit. Therefore, if one firm has progressed further down the learning curve, it would have lower operating costs compared to another firm of the same size that has not yet reached that level of efficiency.

Two Firms of the Same Size May Have Significantly Different