A production unit paid wages of ₹250, rent of ₹60, interest of ₹45 and profit of ₹75. What is the factor cost?
Answer and explanation
Correct answer: ₹430
Factor cost is the total remuneration paid to all factors of production. Wages reward labour, rent rewards land, interest rewards capital, and profit rewards entrepreneurship. Thus, factor cost = ₹250 + ₹60 + ₹45 + ₹75 = ₹430. Option B omits profit, while A and D do not represent the correct total. Therefore, option C is correct.
Frequently asked questions
What is the correct answer to this question?
₹430
Why is this the correct answer?
Factor cost is the total remuneration paid to all factors of production. Wages reward labour, rent rewards land, interest rewards capital, and profit rewards entrepreneurship. Thus, factor cost = ₹250 + ₹60 + ₹45 + ₹75 = ₹430. Option B omits profit, while A and D do not represent the correct total. Therefore, option C is correct.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - Market price and factor cost.
Student feedback
Was this question useful?
👍 0 Helpful 👎 0 Not helpful
Yes 0% No 0%
0 responsesStudent Reviews
No published reviews yet.
