CBSE Class 12 Ecomonics - Producer Behavior And Supply Concepts

Scroll down for PDF

 CBSE Class 6 English Practice Passages. Learning the important concepts is very important for every student to get better marks in examinations. The concepts should be clear which will help in faster learning. The attached concepts made as per NCERT and CBSE pattern will help the student to understand the chapter and score better marks in the



Production: Combining inputs in order to get the output is production.

Production Function: It is the functional relationship between inputs and output in a given state of technology. Q= f(L,K) Q is the output, L: Labor, K: Capital

Fixed Factor: The factor whose quantity remains fixed with the level of output.


Time period, can be classified as: 

1. Very short period or market period

2. Short period / short run

3. Long period / long run

Market period : is that period where supply / output cannot be altered or changed.

Short period /run : is that period where supply / output can be altered / changed by changing only variable factors of production. In other words fixed factors of production remain fixed.

Long period : is that period where all factors of production are changed to bring about changes in output / supply. No factor is fixed.

Variable Factor: Those inputs which change with the level of output.


Here units of capital used remain the same for all levels of output. Hence it is the fixed factor.

Amount of labor increases as output increases. Hence it is a variable factor.


1. Production function is a long period production function if all the inputs are varied.

2. Production function is a short period production function if few variable factors are combined with few fixed factors. class_12_Economics_concept_4b

Concept of product :- Refers to volume of goods produced by a firm or an industry during a specific period of time.

Concepts of product:

Total Product- Total quantity of goods produced by a firm / industry during a given period of time with given number of inputs.

Average product = output per unit of variable input. APP = TPP / units of variable factorn Average product is also known as average physical product. 

Marginal product (MP): refers to addition to the total product, when one more unit of variable factor is employed.

MPn = TPn – TPn-1

MPn = Marginal product of nth unit of variable factor

TPn = Total product of n units of variable factor

TPn-1= Total product of (n-1) unit of variable factor.

n=no. of units of variable factor

MP = ΔTP / Δn

We derive TP by summing up MP



Statement of law of variable proportion: In short period, when only one variable factor is increased, keeping

ther factors constant, the total product (TP) initially increases at an increasing rate, then increases at a decreasing rate and finally TP decreases. MPP initially increase then falls but remains positive then 3rd phase becomes negative. 

Please click the link below to download pdf file for CBSE Class 12 Ecomonics - Producer Behavior And Supply Concepts.


Click on the text For more study material for Economics please click here - Economics

Latest NCERT & CBSE News

Read the latest news and announcements from NCERT and CBSE below. Important updates relating to your studies which will help you to keep yourself updated with latest happenings in school level education. Keep yourself updated with all latest news and also read articles from teachers which will help you to improve your studies, increase motivation level and promote faster learning

TIPS: Study habits for success

Being a student is fairly a difficult job. Alongside maintaining your curricular as well as extra-curricular activities adds more to it. Performance in academics is one of the major concerns. Every parent now tries to get their children more indulged in studies. Need...

How to crack a competitive examination

“How I crack a competitive examination” is a frequently asked question by today’s students. Cracking a competitive exam is a challenging task. Attaining a huge amount of study and solving several complex problems in a limited amount of time is a huge task. Competitive...

Error in the evaluation of answer sheets in CBSE

The education board has witnessed many events where invigilators are being suspended for allotting wrong marks to the students.  This has affected students mainly of classes X and XII in the 2019 CBSE Board Exams. The central board of secondary education has taken...

CBSE to conduct a voluntary test for class 11th and 12th

Nowadays students have the liberty to choose the field they seem to fit in. A few years back the problem was parents who burdened children with their own choices. On the other side, now students along with their parent's support are free to choose their field. Not any...

NCERT NTSE Admit Card 2020 released - know more

Introduction: NTSE 2020 National Talent search examination is conducted by NCERT to take out the students who excel in science. It is organized to measure and let the students with talent outshine in their coming future. This talent search exam is taken in 2 stages....

Requirements for admissions in CBSE affiliated Schools

CBSE gives an advanced form of education. They try to indulge students in interactions and teach application based subjects along with some others. Due to this preponderance of parents, they tend to admit their children in CBSE affiliated schools. General conditions...

Studies Today