In the context of cost-minimization, which type of cost changes in total as the level of output changes?

• A. Sunk cost
• B. Opportunity cost
• C. Variable cost
• D. Fixed cost

Answer: (C)

Verified step by step guidance

1. Understand the definitions of different types of costs in microeconomics: Fixed costs are costs that do not change with the level of output, such as rent or salaries of permanent staff.
2. Variable costs are costs that vary directly with the level of output, such as raw materials or hourly wages.
3. Sunk costs are costs that have already been incurred and cannot be recovered, so they do not change with output decisions.
4. Opportunity cost represents the value of the next best alternative foregone and is not a direct accounting cost that changes with output.
5. Therefore, in cost-minimization, the type of cost that changes in total as output changes is the variable cost.