A variable cost is one that decreases in total as output increases and increases in total as output decreases.

Question

Quizplus · Accepted Answer

A variable cost increases in total as output increases and decreases in total as output decreases. This is because variable costs are directly related to the production of goods or services, such as the cost of materials or labor. As production increases, so do these costs, and as production decreases, these costs decrease as well.

A Variable Cost Is One That Decreases in Total as Output