Question

Labor productivity significantly rises as the firm sells more units of a product, consequently resulting in lower per-unit cost of production because workers ______. Multiple choice question. can specialize and the firm can spread product costs over less output learn by doing and can take on more tasks can specialize and the firm can spread product costs over greater output can use network effects and serve more customers at one time

Answer 1

The increase in labor productivity leads to lower per-unit costs because workers can specialize and the firm can spread product costs over greater output.

Labor Productivity:

• Is the number of goods produced by a single worker
• Is calculated by dividing total production by the number of workers

When labor productivity increases, it means that workers are producing more output. This results in lower costs per product because the cost of labor will remain the same yet the products are increasing.

In conclusion, increased labor productivity leads to lower costs of per unit production because the number of products would rise relative to the cost.

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