Total variable cost
Total variable cost (TVC) represents all costs that increase as output increases. These include raw materials, energy, production worker wages, and packaging costs that are directly proportional to production volume.
Real World
When Greggs increases its sausage roll production, it must buy more pork, pastry, and energy — these rising input costs are its total variable costs increasing with output.
Exam Focus
Link TVC shape to diminishing marginal returns — explain why the curve steepens, not just that it does.
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