Which always increase(s) as output increases?
A) Marginal Cost only
B) Fixed Cost only
C) Total Cost only
D) Variable Cost only
E) Total Cost and Variable Cost

Question

Quizplus · Accepted Answer

Total Cost includes both Fixed Cost and Variable Cost. Fixed Cost does not change with changes in output, whereas Variable Cost does increase as output increases. Therefore, Total Cost and Variable Cost always increase as output increases. Marginal Cost may increase or decrease with changes in output, depending on the law of diminishing marginal returns.

Which Always Increase(s) as Output Increases