The Experience-Curve Concept

question 42

Multiple Choice

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.

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Definitions:

Democratic

Pertaining to a system of government by the whole population, typically through elected representatives.

Social Facilitation

The tendency for an individual's performance on a task to be influenced by the mere presence of others, often leading to improved performance on simple tasks.

Exercise Bike

A stationary piece of exercise equipment that simulates riding a bicycle, used for cardiovascular fitness and endurance training.

Normative Social Influence

The sway of peers that motivates us to adapt our behaviors to be favored and embraced by them.