In the short run, total variable cost
A) includes the cost of capital.
B) is positive when output is zero.
C) includes both the cost of capital and of labour.
D) does not change when production changes.
E) includes the cost of labour.

Question

Quizplus · Accepted Answer

Total variable cost includes the cost of inputs that vary with the level of output, such as labour, raw materials and energy. Therefore, option E stating that total variable cost includes the cost of labour is the correct choice. Options A, B, C and D are incorrect as they do not accurately describe total variable cost.

In the Short Run, Total Variable Cost