How does learning by doing affect average total costs? Short-run average total costs will remain unchanged because any gain in employee productivity will be exactly canceled out by increased fixed costs. Short-run average total costs will fall because employees learn which production processes work and become more productive given the available inputs. Short-run average total costs will rise because firms will hire employees that have failed in previous jobs, causing decreased productivity. Short-run average total costs will rise because employees will continually fail, causing training costs (variable costs) to increase for the firm.
How does learning by doing affect average total costs? Short-run average total costs will remain unchanged because any gain in employee productivity will be exactly canceled out by increased fixed costs. Short-run average total costs will fall because employees learn which production processes work and become more productive given the available inputs. Short-run average total costs will rise because firms will hire employees that have failed in previous jobs, causing decreased productivity. Short-run average total costs will rise because employees will continually fail, causing training costs (variable costs) to increase for the firm.
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQ
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How does learning by doing affect
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Short-run average total costs will remain unchanged because any gain in employee productivity will be exactly canceled out by increased fixed costs.
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Short-run average total costs will fall because employees learn which production processes work and become more productive given the available inputs.
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Short-run average total costs will rise because firms will hire employees that have failed in previous jobs, causing decreased productivity.
-
Short-run average total costs will rise because employees will continually fail, causing training costs (variable costs) to increase for the firm.
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