[A/An] ____ establishes the rate of improvement due to learning as producers realize direct-labor cost improvements as production volumes increase.
A) leverage
B) learning curve
C) knowledge curve
D) product life cycle
E) short-term contract

Question

Quizplus · Accepted Answer

The term "learning curve" is used to describe the rate of improvement due to learning as production volumes increase. As workers become more experienced and efficient, the cost of producing each unit tends to go down. This is known as the learning curve effect. A is incorrect because "leverage" refers to the use of borrowed funds to increase investment returns, and is not relevant to the question. C is incorrect because while "knowledge curve" is a term used in some areas of business, it does not specifically relate to the rate of improvement due to learning in production. D is incorrect because the product life cycle refers to the stages a product goes through from introduction to decline, and is not relevant to the question. E is incorrect because "short-term contract" is not related to the rate of improvement due to learning in production.

[A/An] ____ Establishes the Rate of Improvement Due to Learning