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TOTAL VARIABLE COST AND TOTAL PRODUCT: Because variable cost is largely associated with the cost of employing a variable input in the short run, it's possible to derive the total variable cost curve from the total product curve. This admittedly simplistic connection between total product and total variable cost is designed to illustrate the fundamental role that the law of diminishing marginal returns plays in the slope and shape of the total variable cost curve. Because he slope of the total variable cost curve, which is also the slope of the total cost curve, is marginal cost, this analysis also indicates how the law of diminishing marginal returns relates to marginal cost.

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