Q172
TC curve
A.
Rises continously
AnswerB.
Falls after reaching a maximum
C.
Is horizontal
D.
None of the above
Answer: Option A
Solution
Answer: Option A
Solution:
TC curve rises continously. Total cost (TC) is the total economic cost of production and is made up of variable cost, which varies according to the quantity of a good produced and includes inputs such as labour and raw materials, plus fixed cost, which is independent of the quantity of a good produced and includes inputs that cannot be varied in the short term: fixed costs such as buildings and machinery, including sunk costs if any. Since cost is measured per unit of time, it is a flow variable.