Practice question · Multiple choice
On an 80% experience curve, unit cost falls 20% each time CUMULATIVE volume doubles. Why does holding annual volume constant stop delivering savings?
Hints
- If you make 100 a year, when does cumulative output reach 200? And 400?
- The trigger is a doubling, not a fixed increment.
Show the answer
C. Because a constant yearly output doubles the total ever more slowly
Why
The savings track doublings, and doublings get further apart under constant output. Continuing to cut costs at a steady rate requires accelerating volume, which is the strategic point of the curve.
Practise Planning and Strategy
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
More questions on Planning and Strategy
- Which moves follow the experience-curve logic of buying share early?
- Order the planning cascade from identity to execution.
- File each finding from a retailer’s situation scan into its SWOT box.
- Mission, vision, or SMART objective? Sort each statement.
- Match each competitive position to Porter’s label.
- An airline offers mid-range fares, mediocre service, average costs, and no distinctive route network.…
- Porter argued that a firm pursuing both cost leadership and differentiation usually ends up 'stuck in the…