Question

If a company is operating at a 90% learning curve, as production doubles labor decreases by what percentage? group of answer choices

a. 9%
b. 90%
c. 110%
d. 10%

Answer 1

A company operating at a 90% learning curve would experience a decrease in labor of 10% as production doubles.

Step-by-step explanation:

A learning curve is a concept used in business to represent the relationship between the cumulative production of a product and the time or effort required to produce each unit. It suggests that as production doubles, the time or effort required to produce each unit decreases by a certain percentage. In this case, if a company is operating at a 90% learning curve, it means that as production doubles, the labor required decreases by 10%.

For example, let's say initially it takes 10 hours of labor to produce the first unit. According to the 90% learning curve, when production doubles to 2 units, the labor required for each unit would decrease by 10% to 9 hours. Similarly, when production doubles again to 4 units, the labor required for each unit would decrease by another 10% to 8.1 hours, and so on.