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Pindyck/Rubinfeld, Microeconomics, Eighth Edition Copyright © 2013
Pearson Education, Inc. Publishing as Prentice Hall.
a. Is there a learning curve effect The learning curve describes the relationship between the cumulative output and the inputs required to produce a unit of output. Average cost measures the input requirements per unit of output. Learning curve effects exist if average cost falls with increases in cumulative output. Here, average cost decreases by $0.10
each time cumulative output Q increases by 1000. Therefore, there are learning curve effects.
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