A firm has determined, from past experience, that the learning curve for a new electronic component has a log-linear form with a slope coefficient of -0.05. What is the predicted short-run average variable cost after 12,000 units of a new product have been produced? The beginning short-run average total cost of the product is expected to be $400.
A) $250
B) $8,894
C) $4,800,000
D) None of the above is correct.

Question

Quizplus · Accepted Answer

The correct answer is A because the short-run average variable cost after 12,000 units of a new product have been produced is $250.

A Firm Has Determined, from Past Experience, That the Learning