Explanation:

Production and Costs:
Production is the process of transforming inputs into outputs. In the short run, there are two types of inputs: fixed and variable. Fixed inputs are those inputs that cannot be varied in the short run, such as capital equipment. Variable inputs are those inputs that can be varied in the short run, such as labor and raw materials.

Costs:
There are three main types of costs: fixed costs, variable costs, and total costs.

- Fixed costs: These costs do not vary with the level of output. Examples include rent, insurance, and property taxes.
- Variable costs: These costs vary with the level of output. Examples include wages, raw materials, and electricity.
- Total costs: This is the sum of fixed and variable costs.

Types of Costs:
In addition to fixed, variable, and total costs, there are two other important cost concepts:

- Average cost: This is the total cost divided by the level of output. It represents the per-unit cost of production.
- Marginal cost: This is the additional cost of producing one more unit of output. It is calculated by taking the change in total cost divided by the change in output.

Answer:
Variable costs increase continuously with the increase in production. This is because variable costs are directly related to the level of output. As more units are produced, more variable inputs are required, which leads to an increase in variable costs.

For example, if a company produces 10 units of output and its variable cost is $100, and if it increases its production to 20 units, its variable cost will increase to $200. Therefore, variable costs increase continuously with the increase in production.

Conclusion:
In conclusion, the correct answer to the question is option D, variable cost, as it continuously increases with the increase in production.