Q.Identify and explain the following concept:
Rajaram produced 25 quintals of wheat in his field; from it, he kept aside 2 quintals of wheat for his own family use.

Cost incurred on a fixed factor = Fixed cost.

Fixed cost (also called supplementary or overhead cost) is the expenditure incurred by a firm on fixed factors of production such as machinery, buildings, rent of the plant and salaries of permanent staff. These costs remain constant whatever the level of output — t …

The economic term is Marginal cost — the addition to total cost from producing one additional unit of output. Answer: Marginal cost.

Why: As a firm expands output, its total cost rises. Marginal cost (MC) measures the extra cost of the last unit produced — i.e. the change in total cost divided by the change in output (for one unit, simply the addition to total cost). It is …

Both (A) and (R) are true, and (R) is the correct explanation of (A).

Assertion (A): Supply is a relative term — true. Supply is meaningful only in relation to given conditions, never as an isolated absolute figure.

Reasoning (R): Supply is always expressed in relation to price, time and quantity — true. The quantity a seller offers depends on the price at which it is offered, the time period considered, and it is stated as a definite quantity.

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The economic term is the Long period (Long run) — the time span long enough for all factors of production, including fixed factors, to become variable.

Economists classify time by the adjustability of factors: