The experience curve (also called the learning curve)shows the relationship between:
A)average total cost and output.
B)average variable cost and returns to scale.
C)output and marginal cost.
D)average variable cost and cumulative production volume.

Question

Quizplus · Accepted Answer

The experience curve shows the relationship between average variable cost and cumulative production volume. As production volume increases, average variable cost decreases due to increased efficiency and learning. This relationship is important for businesses to understand as it can help them find ways to lower their production costs and remain competitive in the market. The experience curve (or learning curve) illustrates the relationship between average variable cost and cumulative production volume. As production volume increases, experience and learning enable workers and firms to become more efficient and reduce costs. Therefore, average variable costs decrease as cumulative production volume increases, following the experience/learning curve.

The Experience Curve (Also Called the Learning Curve)shows the Relationship