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Asked by Jacob Parker on May 16, 2024

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A firm's profitability depends on experience curve effects.

Experience Curve Effects

Experience curve effects refer to the reduction in per-unit production costs that occur over time due to increased efficiency, learning, and improvements in technology.

Profitability

A financial metric measuring the degree to which a company or activity generates income greater than its costs, typically expressed as a percentage of revenue.

  • Comprehend the role of experience curves in formulating a firm’s pricing strategy and predicting profitability.
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mezhoura allilicheMay 19, 2024
Final Answer :
True
Explanation :
Experience curve effects refer to the phenomenon where the more a company produces a certain product or service, the more efficient it becomes at doing so, leading to lower costs and increased profitability. Therefore, a firm's profitability can be influenced by experience curve effects.

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