Question

If a firm experiences learning by doing, what is likely to happen to the long-run average total cost curve

Answer 1

the long-run average total cost curve will fall as time goes by

Step-by-step explanation:

In this scenario, the long-run average total cost curve will fall as time goes by. That is because the longer the employees work at the firm the more efficient they will become at their job. As efficiency rises so does production output while at the same time decreasing costs because more employees are able to produce more with less material and less time. This, therefore, causes a downward slope on the total cost curve causing a fall.