Question

An increase in output leads to a(n): Group of answer choices decrease in step cost. increase in total variable cost. increase in total fixed cost. decrease in sunk cost.

Answer 1

Answer:

increase in total variable cost.

Explanation:

Variable costs change depending on the company's total output. If the output decreases, the variable costs will decrease, if the output increases, the variable costs will increase, e.g. materials. On the other hand, fixed costs do not vary depending on the company's output, that is why they are fixed, e.g. rent, depreciation.