Why might learning by doing decrease the long-run average cost of production? A.

Question

Why might learning by doing decrease the long-run average cost of production?

A. As output increases, firms begin to experience increasing returns to scale.

B. As cumulative output increases, managers become unable to schedule the production process as efficiently.

C. As cumulative output increases, engineers gain experiences that decrease costs with increasing defects.

D. As output increases, the production process begins to exhibit diseconomies of scale.

E. As cumulative output increases, workers become more adept, and the speed at which they product increases.

Explanation / Answer

As output increases, firms begin to experience increasing returns to scale. And this is because learning by doing decrease the long-run average cost of production.

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