If firm A has a learning curve with 90% learning and firm B has a learning curve with 80% learning, then:
A) Firm A has more experienced workers
B) Firm B will be more cost efficient over time
C) Firm A workers learn more quickly
D) Firm B has less experienced workers

Question

Quizplus · Accepted Answer

The learning curve with 80% learning for firm B is steeper than the learning curve with 90% learning for firm A. This means that over time, firm B will be able to produce output at a lower cost than firm A. It is not possible to determine which firm has more or less experienced workers or which workers learn more quickly based solely on their learning curves.

If Firm a Has a Learning Curve with 90% Learning