An experience curve illustrates average cost will tend to remain fairly constant while a firm's total cost of production keeps increasing.

Question

Quizplus · Accepted Answer

An experience curve illustrates that the average cost of production decreases as the total volume of production increases due to learning, efficiency, and economies of scale. So, the average cost tends to decrease, not remain fairly constant, as total cost of production increases.

An Experience Curve Illustrates Average Cost Will Tend to Remain