The experience-curve concept:
A) helps a company realize both learning effects and diseconomies of scale.
B) suggests that unit manufacturing costs increase by a certain amount each time output is increased.
C) is very important in industries that mass-produce a standardized output.
D) suggests that achieving low costs allows a firm to charge a premium price.
E) is least likely to bottom out as long as the company does not stop production.

Question

Quizplus · Accepted Answer

The experience-curve concept is particularly important in industries that mass-produce a standardized output. It suggests that as a company produces more units of a particular product, its unit costs of production will decrease, due to both learning effects and economies of scale.

The Experience-Curve Concept