The use of high-technology methods rather than labor in manufacturing products usually means a much greater fixed-cost component to total costs.

Question

Quizplus · Accepted Answer

High-technology methods often require expensive equipment and automation, which results in a higher fixed cost component to the overall production costs. In contrast, labor-intensive methods may have lower fixed costs, but higher variable costs due to the need for more workers.

The Use of High-Technology Methods Rather Than Labor in Manufacturing