Penicillium is a genus of fungus that produces asexual and sexual spores. Sexual spores are produced through the process of sexual reproduction, which involves the fusion of two haploid nuclei to form a diploid zygote. The diploid zygote undergoes meiosis to produce haploid sexual spores.

The sexual spores produced by Penicillium are called ascospores. These spores are produced within a specialized structure called an ascus. The production of ascospores is part of the sexual cycle of Penicillium, which involves the fusion of two haploid nuclei to form a diploid zygote. The zygote undergoes meiosis to produce four haploid nuclei, which then divide to produce eight ascospores.

Ascospores are important for the survival and dispersal of Penicillium. They are dispersed by wind, water, and animals, and can germinate under favorable conditions to produce new colonies of Penicillium. Ascospores are also used in the laboratory to study the genetics and evolution of Penicillium.

In contrast to ascospores, asexual spores of Penicillium are called conidiospores. These spores are produced by mitosis and are not involved in sexual reproduction. Conidiospores are important for the rapid spread of Penicillium in the environment, as they can be easily dispersed by wind, water, and animals.

In summary, Penicillium produces both sexual and asexual spores. Sexual spores are produced through the process of sexual reproduction and are called ascospores. Asexual spores are produced by mitosis and are called conidiospores. Ascospores are important for the survival and dispersal of Penicillium, while conidiospores are important for the rapid spread of the fungus.

Penicillium is a large and difficult genus of saprophytic (feeding on dead and decaying materials) fungi, encountered almost everywhere, and usually the most abundant genus of fungi in soils. Some species of Penicillium  reproduce  sexually by means of asci and ascospores produced  within small stony stromata. Hence, the correct answer  is option 'C'.