Question

When production increases, the variable cost per unit will?

1) Increase
2) Decrease
3) Remain constant
4) Cannot be determined

Answer 1

2) decrease

Because if you have more worker producing whatever your company is selling will decrease because there is not a shortage of your products. But at the same time you could sell your products to a company at a wholesale price and they could charge more regard.

Regardless this could the answer

Good luck, you got this!

Answer 2

The variable cost per unit typically remains constant when production increases, but total variable costs will rise. This does not change the variable cost per unit, but is relevant to the overall cost structure.

Step-by-step explanation:

When production increases, the variable cost per unit has a tendency to remain constant because variable costs are directly correlated with production levels. Each unit will have the same amount in variable costs assigned to it, such as labor and raw materials. It is important to note, however, that the total variable cost will increase as more units are produced, but the cost on a per-unit basis typically does not.

The changes in variable costs can be influenced by diminishing marginal productivity, as noted in the Production in the Short Run section. For example, increasing the number of barbers from one to two may increase the output significantly due to additional manpower. However, as more barbers are added beyond this point, the marginal product increase for each additional barber starts to decrease. This phenomenon does not necessarily change the variable cost per unit but affects the overall productivity and could eventually increase total variable costs.