However, the maximum quantity of the output that can be purchased depends upon the quantity of the fixed factors of production. Marshall calls the variable cost as prime cost. It is also called direct cost, since it varies directly with the change in the level of output. Total variable cost is graphically shown in Fig. 9.2.

Fig. 9.2: Total Fixed Cost, Total Variable Cost and Total Cost Curves

Total variable cost curve starts from the origin indicating that when output is zero, variable cost is nil. Further, the variable cost has a rising trend from left to right. Variable cost initially rises at decreasing rate, then, at increasing rate corresponding to the growth of total product (TP) at increasing rate and decreasing rate respectively. This is clear from the comparison of the shapes of TVC and TP curves.

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