Which of the following best explains the term 'Learning Curve' originally developed in the American aircraft industry?
A) The cost price per aeroplane decreased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled.
B) The cost price per aeroplane increased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled.
C) The cost price per aeroplane decreased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled.
D) The cost price per aeroplane increased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled.

Question

Which of the following best explains the term 'Learning Curve' originally developed in the American aircraft industry? 
A) The cost price per aeroplane decreased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled. 
B) The cost price per aeroplane increased at a fixed percentage as the cumulative production volume of a particular type of aircraft doubled. 
C) The cost price per aeroplane decreased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled. 
D) The cost price per aeroplane increased at a variable percentage as the cumulative production volume of a particular type of aircraft doubled.

Quizplus · Accepted Answer

The term 'Learning Curve' refers to the phenomenon where the cost per unit of production decreases at a fixed percentage as the total volume of production increases. This concept was observed in the American aircraft industry, where it was noted that the more aircraft produced, the lower the cost per aircraft, due to efficiencies gained in the production process.

Which of the Following Best Explains the Term 'Learning Curve