To Complete the First Setup on a New Machine Took

question 124

Multiple Choice

To complete the first setup on a new machine took an employee 200 minutes.Using an 80% incremental unit-time learning curve indicates that the second setup on the new machine is expected to take

• A)160 minutes.
• B)120 minutes.
• C)80 minutes.
• D)60 minutes.
• E)128 minutes.

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Definitions:

Natural-Monopoly Situation

A market condition in which a single firm can produce output at a lower cost than can multiple firms, leading to a monopoly justified by efficiencies of scale.

Implicit Costs

The opportunity costs that arise from using resources that a business already owns rather than earning revenue from those resources elsewhere.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting a business activity, such as wages, rent, and materials.

Economic Profits

Profits earned by a company after accounting for both explicit (direct) and implicit (opportunity) costs.