The reason that total cost rises with output is that ______ cost is rising.

Question

Quizplus · Accepted Answer

Total cost can be divided into fixed costs and variable costs. Fixed costs remain constant regardless of the level of output, while variable costs vary directly with the level of output. Therefore, the reason that total cost rises with output is due to the increase in variable costs, making choice A the best answer. Marginal cost is the additional cost of producing one more unit of output, and while it may also be increasing with output, it is not the main reason for the rising total cost.

The Reason That Total Cost Rises with Output Is That