If factor cost is ₹8,300 crore and net indirect taxes are ₹550 crore, what will be market price?
Answer and explanation
Correct answer: ₹8,850 crore
Market price is obtained by adding net indirect taxes to factor cost because Market Price = Factor Cost + Net Indirect Taxes. Therefore, ₹8,300 crore + ₹550 crore = ₹8,850 crore. Option C is correct. Option B merely repeats factor cost, option A subtracts the tax, and option D adds the figures incorrectly. The direction of the adjustment is essential in this conversion.
Frequently asked questions
What is the correct answer to this question?
₹8,850 crore
Why is this the correct answer?
Market price is obtained by adding net indirect taxes to factor cost because Market Price = Factor Cost + Net Indirect Taxes. Therefore, ₹8,300 crore + ₹550 crore = ₹8,850 crore. Option C is correct. Option B merely repeats factor cost, option A subtracts the tax, and option D adds the figures incorrectly. The direction of the adjustment is essential in this conversion.
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.
