Question

total units produced
total units produced
graph 3
graph 4
total units produced
total units produced
which of the graphs in figure 1 illustrates the behavior of a total variable cost?
a. graph 3
b. graph 2
c. graph 1
d. graph 4

Explanation:

Identify cost behavior types

Using the Variable Cost, Fixed Cost, and Mixed Cost knowledge points

• Graph 1 (top-left, implied) shows a constant horizontal line starting above zero, representing total fixed cost.
• Graph 2 (top-right, implied) shows a straight line starting above zero with a positive slope, representing total mixed cost.
• Graph 3 (bottom-left) shows a straight line starting at the origin \((0,0)\) with a positive slope, representing total variable cost.
• Graph 4 (bottom-right) shows a series of horizontal steps, representing step-variable or step-fixed cost.

Match to the question

Using the Variable Cost knowledge point

• The question asks which graph illustrates the behavior of a total variable cost.
• Total variable cost starts at zero when production is zero and increases proportionally with volume.
• Graph 3 correctly depicts this behavior.
• Graph 3 corresponds to option (a).

Answer:

• a. Graph 3 (Correct answer)
• b. Graph 2
• c. Graph 1
• d. Graph 4