The Learning Curve for a Product Is 80 Percent

question 75

Multiple Choice

The learning curve for a product is 80 percent. The first unit took 100 hours to complete. The manufacturer wants to determine how many hours the fifth unit will take by using the logarithmic method. The coefficient b for that calculation is approximately

• A) -.0969
• B) -.2231
• C) -.3219
• D) .80
• E) 1.903

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Definitions:

Producer Surplus

The difference between the amount a producer is willing to accept for a good and the actual amount received from its sale.

Price Ceiling

A legal maximum price that can be charged for a product or service, typically set to protect consumers.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive, usually measured above the supply curve up to the price level.

Price Ceiling

A legally established maximum price for a good or service, beyond which it cannot be sold.