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Home Questions CWE3D9X9AC
Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Production and Costs

Question:
Read the following statements - Assertion (A) and Reason (R):
Assertion: When we change the level of output, whatever change occurs to total cost is entirely due to the change in total variable cost.
Reasoning: In the short run, fixed cost cannot be changed. From the given alternatives choose the correct one:
Options:
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Correct Answer:
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Explanation:
In the short run, fixed cost cannot be changed. So, when we change the level of output, whatever change occurs to total cost is entirely due to the change in total variable cost.

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