As output increases, total variable cost
A)increases more rapidly than does total cost.
B)increases continuously at a decreasing rate.
C)increases at a decreasing rate and then at an increasing rate.
D)increases at a constant rate.

Question

Quizplus · Accepted Answer

Total variable cost typically increases at a decreasing rate due to initial efficiencies in production (e.g., better utilization of resources), and then at an increasing rate as the limits of capacity are reached, leading to inefficiencies (e.g., overtime pay, equipment strain). This pattern reflects the law of diminishing returns.

As Output Increases, Total Variable Cost