Final answer:
A factor of production whose quantity can be altered in the short term is a variable cost (b). Variable costs change with the level of production and can include labor and raw materials. Fixed costs, such as rent, remain the same regardless of output levels.
Step-by-step explanation:
A factor of production whose quantity can be changed during a particular period is known as a variable cost. In the short-run, firms face both fixed costs and variable costs. Fixed costs are expenses that do not vary with the level of production, like rent or equipment leases. Variable costs, on the other hand, change with the level of output. These costs include items such as labor, raw materials, and energy consumption. With increased production, variable costs will rise due to the need for more resources, while fixed costs remain unchanged.
Regarding the question asked by the student, the correct answer would be (b) Variable cost. This is because variable costs are directly related to the firm's level of production and can be altered in the short term as output changes. It is important to note that in economic decisions about future production or pricing, fixed costs, being sunk costs, should not influence the decision as they cannot be altered.