Final answer:
A total-cost curve illustrates the relationship between the quantity of output produced and the total cost of production, covering both fixed and variable costs.
Step-by-step explanation:
The correct answer to the question is Option B, which states that a total-cost curve shows the relationship between the quantity of output produced and the total cost of production. The total cost includes both fixed and variable costs. Fixed costs remain constant regardless of the level of production, such as rent or salary of permanent staff, and they are represented as the vertical intercept of the total cost curve. Variable costs, on the other hand, change with the level of output, such as raw materials or hourly wages. As production increases, the variable costs are added to the fixed costs, with the sum representing the total cost of production.
It is essential to understand this relationship as it helps businesses determine the cost of producing different quantities of goods and how it impacts their overall profitability. Additionally, understanding the total cost curve is vital for making decisions about pricing and production levels to maximize profit.