In comparing the changes in TVC and TC associated with an additional unit of output, we find that
A)no generalization about the changes in TC and TVC can be made.
B)the changes in TC and TVC are equal.
C)the change in TC is greater than the change in TVC.
D)the change in TVC is greater than the change in TC.

Question

Quizplus · Accepted Answer

The changes in Total Cost (TC) and Total Variable Cost (TVC) associated with an additional unit of output are equal because TC includes TVC (along with any fixed costs, which do not change with output level), so the marginal increase in costs attributed to an additional unit of output affects both TC and TVC equally. Fixed costs do not vary with output, so they do not affect the comparison.

In Comparing the Changes in TVC and TC Associated with an Additional