Because marginal cost is always ________ in the short run, total variable cost always ________ when output increases.

A) positive; increases
B) positive; decreases
C) negative; increases
D) negative; decreases

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit, indicating the cost of producing one more item.

Total Variable Cost

The sum of all costs that vary with the level of output, including things like raw materials, labor costs that vary with production volume.

Output Increases

A situation where a firm or economy produces a greater quantity of goods or services.