Question

When using the incremental unit-time learning model

a. the cumulative time per unit declines by a constant percentage when production doubles.
b. the time needed to produce the last unit declines by a constant percentage when production doubles.
c. the time to produce one additional unit decreases by a constant percentage.
d. costs increase incrementally in an undetermined pattern.

Answer 1

In the incremental unit-time learning model, the time to produce one additional unit decreases by a constant percentage when production doubles.

Step-by-step explanation:

In the incremental unit-time learning model, the time to produce one additional unit decreases by a constant percentage when production doubles. This means that as the firm continues to produce more units, the time needed to produce each additional unit decreases. For example, if it initially takes 2 hours to produce 10 units, it may only take 1 hour to produce the next 10 units. This pattern continues as production doubles.