In chapter 6, you have read the long-run average cost (AC) of operation may decrease for three reasons.

a. List and explain the three reasons why the log-run unit cost may decrease over time.

b. Give an example of the learning curve for a business operation where the average costs were reduced due to cumulative production.

c. Suppose that the global learning curve for solar power installation in the US is 93% according a rcent study, interpret what it means?

d. How might the learning curve information help businesses in making operational decision?

e.Explain the concept of economies of scope. Suppose Conner runs two kind of rafting trips. If he spends all day on wild whitewater rafting, he can do 3 trips, or he can do 4 trips of a mellow wildlife rafting. If he does some of each, however, he can do more total trips: 2 whitewater trips and 3 wildlife trips. Conner's time is valued at $20/ hour. Finding the value for the economies of scope of Conner's rafting experience. What can you say about his economies of scope? i.e. does Conner reduce the average cost by making some of each trip or by making each trip separately?Show your work.