increases
does not increase
decreases
None of these
Answer is Right!
Answer is Wrong!
The correct answer is A. increases.
Variable costs are costs that change in proportion to the amount of goods or services produced. For example, the cost of raw materials is a variable cost, because the more goods you produce, the more raw materials you will need.
The total variable cost is the sum of all the variable costs incurred in producing a given level of output. As output increases, the total variable cost will also increase. This is because the more goods you produce, the more raw materials, labor, and other variable costs you will incur.
The following is a brief explanation of each option:
- Option A: increases. This is the correct answer, as explained above.
- Option B: does not increase. This is incorrect, as variable costs do increase in proportion to output.
- Option C: decreases. This is incorrect, as variable costs do not decrease in proportion to output.
- Option D: None of these. This is incorrect, as option A is the correct answer.