Define variable cost. Explain the behaviour of total variable cos… - Vidyadip

Question

Define variable cost. Explain the behaviour of total variable cost as output increases.

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Answer

The cost which changes with change in output is VC.
Behaviour of TVC: 2 phases.

Initially, as output is increased, TVC rises at a decreasing rate.
After a level of output, TVC increases at an increasing rate.

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