ECONOMICS

Detailed explanation-1: -When the output is equal to zero, the variable cost is zero. Variable costs are those that depend on the level of output. The fixed costs are those that are present even when production is zero, and therefore the variable cost is zero when output is zero.

Detailed explanation-2: -The cost incurred on variable factors of production is called Total Variable Cost (TVC). These costs vary with the level of output or production. Thus, when production level is zero, TVC is also zero.

Detailed explanation-3: -Variable cost curve originates from the point of origin because when output is zero, variable cost is also zero.

Detailed explanation-4: -Fixed costs are always shown as the vertical intercept of the total cost curve; they are the costs incurred when output is zero, so there are no variable costs. You can see in the graph that once production starts, total costs and variable costs rise.

Detailed explanation-5: -If no production takes place, variable costs are zero. As production increases, total variable costs increase at a decreasing rate, since the marginal product for each additional worker is increasing. With diminishing marginal product, the total variable cost increases at an increasing rate.