Total variable costs ________ with decreasing output.
A) always increase
B) always decrease
C) initially increase and then decrease
D) initially decrease and then increase

Question

Quizplus · Accepted Answer

Total variable costs decrease with decreasing output because variable costs vary directly with the level of production. If production decreases, the costs associated with production (like materials and labor) also decrease.

Total Variable Costs ________ with Decreasing Output