Final answer:
The dotted line on a graph that depicts the relationship between units produced and total cost signifies the fixed costs, which are incurred even when the production is zero.
Step-by-step explanation:
In the context of the graph depicting the relationship between units produced and total cost, the dotted line typically represents fixed costs. Fixed costs are those that remain constant regardless of the level of production, and on a graph, they are represented by the vertical intercept of the total cost curve. This is because fixed costs are incurred even when the output is zero, implying that there are no variable costs at that point.
As production increases, variable costs come into play and are added to the fixed costs, contributing to the upward slope of the total cost curve. The dotted line, representing fixed costs, establishes a baseline that remains constant regardless of the quantity of units produced. Understanding this distinction aids in analyzing the cost structure and behavior as production levels change.