Variable costs start at zero and rise with output

Steps:

• Total fixed cost (TFC) remains constant regardless of output level.
• Total variable cost (TVC) equals zero at output of 0 and increases with each unit produced.
• TVC exceeds TFC when cumulative variable costs surpass the fixed amount.
• Without specific cost data, the exact output level cannot be determined.

Why D is correct:

• Not enough information; assumes a scenario where TVC surpasses TFC at output 3, but no costs provided to verify.

Why the others are wrong:

• A: At output 0, TVC is 0, below any positive TFC.
• B: At low output like 1, TVC typically remains below TFC without data confirming otherwise.
• C: At output 2, TVC may still not exceed TFC based on standard assumptions.

Final answer: Not enough information.