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Production and cost — Economics STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceEconomicsProduction and cost3 Marks
Question
Define variable costs. Explain the behaviour of total variable cost as output increases.
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Answer

Variable costs are the costs which vary with change in the level of output, e.g., expenditure on raw material, power and fuel etc.
TVC rises at decreasing rate in the beginning and then rises at increasing rate after a point as output increases.

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