Ever since Giselle's company developed its new product ten years ago, Giselle has managed its production with little turnover in workers. During that time, the company's average cost has fallen by 30%, due to the refinement of its production methods, thereby achieving greater efficiency. Other rival companies have not achieved such low costs. The cost advantage that Giselle's company now has over rivals is referred to as _____ achieved through _____.
A)marginal cost reduction; long-term production
B)a key input price reduction; unique cost advantages
C)a unique cost advantage; learning by doing
D)mass production; key input price reduction

Question

Quizplus · Accepted Answer

The cost advantage that Giselle's company has achieved over rivals is referred to as a unique cost advantage achieved through learning by doing. This is because the company has developed more efficient production methods over time, resulting in a 30% reduction in average cost, and has managed to maintain its workforce with little turnover. This type of cost advantage is difficult for competitors to replicate because it requires a combination of experience, expertise, and efficient production methods.

Ever Since Giselle's Company Developed Its New Product Ten Years