The Presence of a Learning Curve May Induce a Decision

question 137

Multiple Choice

The presence of a learning curve may induce a decision maker in a startup firm to choose:

• A) low levels of output to exploit economies of scale.
• B) high levels of output to exploit economies of scale.
• C) low levels of output to shift the average cost curve down over time.
• D) high levels of output to shift the average cost curve down over time.
• E) to produce more than one output.

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Definitions:

Output

The total amount of goods or services produced by a company or economy.

Marginal Social Cost

Sum of the marginal cost of production and the marginal external cost.

Air Pollutants

Substances in the air that can cause harm to humans and the environment.

Plastic Containers

Manufactured receptacles made from plastic materials, used for storing, transporting, and packaging goods.