Explanation:

- Total variable costs always increase as output increases, since variable costs are tied directly to production levels.

- Option 1: increase – This is correct. As you produce more, total variable costs go up, though the rate can vary.

- Option 2: increase at an increasing rate – Sometimes, but not always. This happens if marginal cost rises with output (diminishing returns).

- Option 3: increase at a constant rate – Only true if variable cost per unit is constant (rare in reality).

- Option 4: increase at a diminishing rate – Occurs if production becomes more efficient as output rises (rare or only at the start).

Correct Answer: Option 1 – increase