Question: A computer company's cost function, which relates its average cost of production AC to its cumulative output in thousands of computers Q and its plant
A computer company's cost function, which relates its average cost of production AC to its cumulative output in thousands of computers Q and its plant size in terms of thousands of computers produced per year qwithin the production range of to computers is given by
ACequalsminusQplusq
Part
Is there a learningcurve effect? A learningcurve effect
Part
A
exists because average costs decrease as current output, q increases.
B
does not exist because average costs decrease as cumulative output, Q increases.
C
exists because average costs increase as current output, q increases.
D
exists because average costs decrease as cumulative output, Q increases.
E
does not exist because average costs increase as current output, q increases.
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