Meadows Mowers initially spent nine man-hours to assemble a lawnmower. But as the production doubled, the number of hours spent on assembling a mower reduced by 20 percent. This increase in productivity reduced the company's cost per unit. What is this phenomenon referred to as?

Question

Quizplus · Accepted Answer

The phenomenon seen in this scenario is referred to as learning-curve effect. As individuals and teams engage repeatedly in an activity, whether writing computer code, developing new medicines, or building submarines, they learn from their cumulative experience. This in turn can drive down costs.

Meadows Mowers Initially Spent Nine Man-Hours to Assemble a Lawnmower