Variable cost divided by the change in quantity produced is
A. average variable cost.
B. marginal cost.
C. average total cost.
D. None of the above is correct.
To find the correct answer, you need to understand the definitions of the different cost concepts.
Variable cost refers to costs that change in direct proportion to the quantity of goods or services produced. It includes costs such as labor, raw materials, and utilities.
Average variable cost is found by dividing the total variable cost by the quantity produced. It represents the average cost incurred for each unit produced.
Marginal cost, on the other hand, is the additional cost that is incurred by producing one additional unit of output. It can be calculated by taking the change in total cost divided by the change in quantity produced. So, variable cost divided by the change in quantity produced would give you the marginal cost.
Average total cost is the total cost per unit of output. It includes both fixed and variable costs and is calculated by dividing the total cost by the quantity produced.
Based on the definitions, the correct answer to the question is B. Marginal cost, as variable cost divided by the change in quantity produced gives you the marginal cost.