Area under short run marginal cost (SMC) is _______.
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: TVC
- Short-Run Marginal Cost (SMC) = ΔTVC / ΔQ
- TVC (Total Variable Cost) is obtained by summing all marginal costs (SMC) over different levels of output.
- Graphically, TVC is the area under the SMC curve up to that level of output.