Answer:
Per-unit production costs would decrease.
Explanation:
Real domestic output in an economy is 2400 units.
The quantity of inputs is 60, and the price of each input is $30.
Total cost of producing 2400 units
= [tex]60 \ \times\ 30[/tex]
= 1,800
Per unit cost of producing 2400 units
= [tex]\frac{1,800}{2,400}[/tex]
= 0.75
Total cost of producing 3000 units
= [tex]60 \ \times\ 30[/tex]
= 1,800
Per unit cost of producing 3000 units
= [tex]\frac{1800}{3,000}[/tex]
= 0.6
If productivity increased such that 3000 units are now produced with the quantity of inputs still equal to 60, per unit production cost will decrease.
