Which of the following statements is true of the learning curve?
A) The lower the cumulative output, the stronger the learning effect.
B) As cumulative output increases, average costs will fall.
C) Productivity decreases when additional output is produced.
D) A ﬁrm producing lower output moves down the learning curve faster.

Question

Quizplus · Accepted Answer

As cumulative output increases, firms gain more experience and efficiency, leading to a decrease in the average cost per unit. This phenomenon is captured by the concept of the learning curve, which illustrates how increasing production leads to improvements in productivity and cost reductions.

Which of the Following Statements Is True of the Learning