If factor cost is ₹2,000 and net indirect taxes are ₹250 what will be market price?
Answer and explanation
Correct answer: ₹2,250
To convert factor cost into market price, apply Market Price = Factor Cost + Net Indirect Taxes. The calculation is ₹2,000 + ₹250 = ₹2,250. Thus option C is correct. Option B is only the given factor cost; ₹1,750 would be obtained by subtracting the tax, which is the reverse conversion, and ₹2,500 is an arithmetic error. The units remain the same as the amounts given.
Frequently asked questions
What is the correct answer to this question?
₹2,250
Why is this the correct answer?
To convert factor cost into market price, apply Market Price = Factor Cost + Net Indirect Taxes. The calculation is ₹2,000 + ₹250 = ₹2,250. Thus option C is correct. Option B is only the given factor cost; ₹1,750 would be obtained by subtracting the tax, which is the reverse conversion, and ₹2,500 is an arithmetic error. The units remain the same as the amounts given.
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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