Thank you for visiting Consider a process with a unit cost of 100 for the first unit and a learning rate of 0 5 What will be the unit. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The unit cost will be $12.50.The correct answer is option c.
The learning rate of 0.5 means that for each doubling of cumulative production, the unit cost will decrease by 50%.
For the 2nd unit, the cost will be 0.5 x $100 = $50.
For the 4th unit, the cost will be 0.5 x $50 = $25.
For the 8th unit, the cost will be 0.5 x $25 = $12.50.
For the 16th unit, the cost will be 0.5 x $12.50 = $6.25.
And finally, for the 32nd unit, the cost will be 0.5 x $6.25 = $3.125 or rounded to the nearest cent, $3.13.
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