In the short run,
A)TVC will increase for a time at a diminishing rate, but then beyond some point will increase at an increasing rate.
B)TVC will increase for a time at an increasing rate, but then beyond some point will increase at a diminishing rate.
C)TVC will increase by the same absolute amount for each additional unit of output produced.
D)one cannot generalize concerning the behavior of TVC as output increases.

Question

Quizplus · Accepted Answer

In the short run, Total Variable Cost (TVC) typically increases at a diminishing rate initially due to increasing returns to the variable input. However, as production continues to increase, the law of diminishing marginal returns kicks in, causing TVC to increase at an increasing rate. This reflects the initial efficiency gains from specialization and the eventual inefficiencies from over-utilizing fixed resources.

In the Short Run