Asked by Landrie Pierce on Jun 11, 2024
Verified
As manufacturing outputs increase,unit prices decrease.This is called the ________.
A) penetration cost
B) experience curve
C) demand curve
D) skimming price
Experience Curve
A concept in business that describes how production costs decrease as a company gains experience and increases output.
Manufacturing Outputs
The total quantity or volume of products produced by a manufacturing process or facility within a specific timeframe.
Unit Prices
The cost of a given unit of product or service.
- Comprehend the connection among unit costs, output volume, and the influence of experience curve effects.
Verified Answer
SY
Sunny YadavJun 11, 2024
Final Answer :
B
Explanation :
The experience curve, also known as the learning curve, states that as production quantities double, the unit cost of a product decreases by a constant percentage. This cost reduction occurs due to the efficiencies gained through experience, learning, and streamlining production processes. Therefore, as manufacturing outputs increase, unit prices decrease due to the experience curve. The other options - penetration cost, demand curve, and skimming price - do not refer to this specific concept.
Learning Objectives
- Comprehend the connection among unit costs, output volume, and the influence of experience curve effects.