Managers should not become complacent about efficiency-based cost advantages because:
A)both learning effects and economics of scale go on forever.
B)the experience curve is likely to bottom out at some point.
C)cost advantages gained from experience effects are not affected by the development of new technologies.
D)unit costs keep reducing as output increases. E)the experience curve steadily rises after a certain threshold is reached indicating an increase in unit costs.

Question

Quizplus · Accepted Answer

While learning effects and economies of scale may go on forever, the experience curve is likely to bottom out at some point, indicating diminishing returns to further production increases. Thus, managers should not become complacent about efficiency-based cost advantages as they may not continue to improve indefinitely.

Managers Should Not Become Complacent About Efficiency-Based Cost Advantages Because