A Firm Has Determined, from Past Experience, That the Learning

Multiple Choice

A firm has determined, from past experience, that the learning curve for a new electronic component has a log-linear form with a slope coefficient of -0.10. What is the predicted short-run average variable cost after 10,000 units of a new product have been produced? The beginning short-run average total cost of the product is expected to be $1,000.

A) $398
B) $1,000,000
C) $10,000,000
D) None of the above is correct.