JAMB Economics 2019 Paper

Concept:Variable costs are the total expenses that change directly with the level of output produced.Explanation:In a firm's production department, total variable cost (TVC) includes only those costs that increase or decrease as production changes.The variable cost items for the week are:₦6,000 for wages₦800 for raw materials₦300 for electricityAdd them together:$$TVC = 6000 + 800 + 300$$$$TVC = ₦7,100$$This excludes fixed costs, which do not vary with output.Answer:Total variable cost is ₦7,100.Correct option: B. ₦7,100.