if a firm producing 100 units at $5.00 each experience an 80% experience curve, what will units costs be at 200 units of production?
Total cost for 100 units = 5*100 = $500
Now learning curve coefficient at N = 2 and 80% learning curve = 1.80 (total). This is as per learning curve coefficient table.
So total cost for 100*2 = 200 units (n = 2) will be = $500*1.80
= $900
Thus unit costs for the next 100 units (i.e. from 100 to 200) = (900-500/100) = $4 per unit
Unit costs for all the 200 units = $900/200 units = $4.5 per unit
Unit cost for next 100 units | $ 4 per unit |
Unit costs for all 200 units | $4.5 per unit |
if a firm producing 100 units at $5.00 each experience an 80% experience curve, what will...
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