Which statement best describes the relationship between total variable costs and output?
A) Total variable costs increase as output decreases.
B) Total variable costs decrease as output increases.
C) Total variable costs stay the same as output changes.
D) Total variable costs = variable rate × amount of output.

Question

Quizplus · Accepted Answer

Total variable costs are calculated by multiplying the variable cost per unit by the amount of output, so they change in direct proportion to the level of output.

Which Statement Best Describes the Relationship Between Total Variable Costs