Learning Curve
Efficiency improvement as people gain experience doing task.
Formula
Unit Cost = Fixed Cost / Cumulative Output (reduces as output doubles)
Real World
Boeing found that as its engineers assembled more 737 aircraft, the labour time per plane fell significantly — a textbook learning curve that reduced production costs over time.
Exam Focus
State that unit costs fall as cumulative output rises; avoid saying 'costs fall with time' — it is experience, not time, that drives the effect.
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