The learning effect is one form of:
A) diversification.
B) creating value through increasing transactions costs.
C) creating value through stabilizing transactions costs.
D) creating value through decreasing transactions costs.

Question

Quizplus · Accepted Answer

The learning effect is a phenomenon where the cost of production decreases as the quantity produced increases due to the increased efficiency in production processes and the development of specialized skills by labor. This decrease in production cost leads to a decrease in transactions costs, making it easier and cheaper to produce and sell goods, which creates value through decreasing transactions costs. Therefore, option D is the correct answer.

The Learning Effect Is One Form Of