What is the relationship between total variable costs and output?
A)Total variable costs stay the same as output changes.
B)Total variable costs increase as output decreases.
C)Total variable costs decrease as output increases.
D)Total variable costs equal variable rate × amount of output.

Question

Quizplus · Accepted Answer

Total variable costs are directly proportional to the level of output, meaning they increase as output increases and decrease as output decreases. This is because variable costs depend on the amount of production or activity level. The formula for total variable costs is indeed the variable cost per unit (variable rate) multiplied by the number of units produced (amount of output).

What Is the Relationship Between Total Variable Costs and Output