Which of the graphs in Figure 20-1 illustrates the behavior of a total variable cost?
A) Graph 2
B) Graph 3
C) Graph 4
D) Graph 1

Question

Which of the graphs in Figure 20-1 illustrates the behavior of a total variable cost?
A) Graph 2 
B) Graph 3 
C) Graph 4 
D) Graph 1

Quizplus · Accepted Answer

Graph 2 shows fixed costs as it remains constant regardless of the level of output. Graphs 1 and 3 show the behavior of average variable cost and average total cost, respectively. Graph 4 shows the behavior of total cost as it increases with an increase in output. Therefore, the correct choice is B, which shows the behavior of total variable cost, as it only includes costs that vary with output.

Which of the Graphs in Figure 20-1 Illustrates the Behavior