Assertion: There can be more than one input combinations with which a firm can produce a desired level of output.
Reasoning: For every level of output, a firm chooses the least cost input combination.
Answer & explanation
Correct answer: option 2
The correct answer is option 2: Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.
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Assertion (A) is correct: In production, a firm can often use different combinations of inputs (such as labor and capital) to produce the same level of output. This is based on the concept of input substitutability, which is represented by isoquants in production theory.
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Reasoning (R) is also correct, but it does not explain (A): While it is true that a firm aims to choose the least-cost input combination, this explains how a firm selects from multiple possible input combinations. However, the existence of multiple input combinations is due to the nature of the production function and isoquants, not directly because firms minimize costs.