Consider the following statements when answering this question. I. As

Consider the following statements when answering this question. I. As Boeing’s production fell 10% to 100 planes last year, learning by doing cannot account for this year’s changes in long-run average costs. II.

Failure to take into account the effects of learning by doing will lead to overestimates of the cost-output elasticity. A) I is true, and II is false.
B) I is false, and II is true.
C) Both I and II are true.
D) Both I and II are false.

ANSWER

B