Question

If a firm is on a learning curve this implies

a. That the firm’ s variable resources are not efficiently employed.

b. That the firm is enjoying a comparative advantage in the industry.

c. That the firm is enjoying economies of scale.

d. That the firm’s cumulative average total costs are declining.

e. That the firm’s cumulative average fixed costs are increasing.

Please advise why in a brief explantion

Answer 1

c. That the firm is enjoying economies of scale

Learning Curve........In a given defined period of time when the relation between cost and output is graphically depicted it is called learning curve concept.
Economies of Scale.........The reference to the reduced costs per unit which happens due to the increased total output of a product is called economies of scale.

So here when the firm is on the learning curve then that means that somewhere it is trying to depict the relation between the output and the total cost. When the total output increases then the cost per unit decreases and this is shown graphically on the learning curve. Therefore, the firm is enjoying economies of scale is what the firm shows when it is on the learning curve.