As manufacturing outputs increase,unit prices decrease.This is called the ________.
A) penetration cost
B) experience curve
C) demand curve
D) skimming price

Question

Quizplus · Accepted Answer

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.

As Manufacturing Outputs Increase,unit Prices Decrease