If a calculator company produces 100,000 hand calculators at a cost of $10, but the cost drops to $9 when it produces 200,000 and $8 when it produces 400,000 hand calculators, the decline in average cost with accumulated product experience is called the price elasticity of demand.

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The decline in average cost with accumulated product experience is actually called economies of scale. Price elasticity of demand refers to the responsiveness of demand for a product to changes in its price.

If a Calculator Company Produces 100,000 Hand Calculators at a Cost