Study the given curve and answer the question.
The area of the rectangle OVBq0 will give us____________.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Total Variable Cost
The height OV of the rectangle is the AVC at q0, and its base Oq0 is the output. AVC times output is the total variable cost.
NCERT (2026-27): “Shapes of the Short Run Cost Curves … In Figure 3.6 we measure output along the horizontal axis and AVC along the vertical axis. At q0 level of output, AVC is equal to OV . The total variable cost at q0 is TVC = AVC × quantity = OV × Oq0 = the area of the rectangle OV Bq0.”
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