What Is Total Variable Cost

question 114

Multiple Choice

What is total variable cost?

• A)Those costs that do not vary with the level of output.
• B)The total of all costs that vary with the level of output.
• C)The sum of both total fixed cost and marginal cost.
• D)The increase in total variable cost as a result of producing one more unit of output.

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Definitions:

Profit Function

An equation or model that represents the total profit of a business, calculated as total revenue minus total costs.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Two-part Tariff

A pricing strategy that consists of a fixed fee plus a variable usage fee, common in services like utilities.

Entry Fee

An initial charge required to gain access to a service, event, or establishment.