The area under the short run marginal cost (SMC) curve up to any level of output gives the ________ at that level.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → TVC
Each SMC is the extra variable cost of one more unit. Adding them up to a level gives TVC; on a graph this sum is the area under the SMC curve.
NCERT (2026-27): “Shapes of the Short Run Cost Curves … At zero level of output, SMC is undefined. The TVC at a particular level of output is given by the area under the SMC curve up to that level. …” “3.7.1 Short Run Costs … Just like the case of marginal product, marginal cost also is undefined at zero level of output. It is important to note here that in the short run, fixed cost cannot be changed. When we change the level of output, whatever change occurs to total cost is entirely due to the change in total variable cost. So in the short run, marginal cost is the increase in TVC due to increase in production of one extra unit of output. For any level of output, the sum of marginal costs up to that level gives us the total variable cost at that level.” |