Define learning curve. Outline two models that can be used when incorporating learning into the estimation of cost functions.
A learning curve is a function that measures how labor hours per unit decline as units of production increase due to workers learning and improving.
Model 1:Cumulative in learning model- As cumulative average declines by a certain percentage cumulative quantity of units produced doubles.
Model 2: Incremental unit-time- the time needed to produce the last unit decreases by a constant percentage as cumulative quantity of units produced doubles.
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