With respect to total variable costs, which of the following statements is true ? A. They will remain the same as production levels change within the relevant range. B. They will decrease as production decreases within the relevant range. C. They will increase as production decreases within the relevant range. D. They will decrease as production increases within the relevant range.

Question

Business

Jose Nelson

27 January, 00:49

With respect to total variable costs, which of the following statements is true ? A. They will remain the same as production levels change within the relevant range. B. They will decrease as production decreases within the relevant range. C. They will increase as production decreases within the relevant range. D. They will decrease as production increases within the relevant range.

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Answers (1)

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Munchkin · Answer 1

The correct answer is option B.

Explanation:

Variable cost is the cost incurred on the variable factors employed in the process of production. To increase production more and more variable inputs are required.

The total variable cost is the total cost incurred on the variable inputs. It varies directly with the volume of activity in the relevant range. So when the production decreases it decreases and vice versa.