Factor cost is ₹2,200 crore and it is 110 percent of market price. What is market price?
Answer and explanation
Correct answer: ₹2,000 crore
Use the stated percentage relationship: Factor Cost = 110% of Market Price = 1.10 × MP. Therefore, MP = ₹2,200/1.10 = ₹2,000 crore. Option B is correct. ₹2,420 crore comes from multiplying ₹2,200 by 1.10, but ₹2,200 is already the factor cost, which is the 110% value; it must be divided by 1.10 to find the base market price. The other choices do not produce a 110% factor-cost figure.
Frequently asked questions
What is the correct answer to this question?
₹2,000 crore
Why is this the correct answer?
Use the stated percentage relationship: Factor Cost = 110% of Market Price = 1.10 × MP. Therefore, MP = ₹2,200/1.10 = ₹2,000 crore. Option B is correct. ₹2,420 crore comes from multiplying ₹2,200 by 1.10, but ₹2,200 is already the factor cost, which is the 110% value; it must be divided by 1.10 to find the base market price. The other choices do not produce a 110% factor-cost figure.
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.
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