If factor cost is ₹900 and net indirect taxes are ₹150, what will be the market price?
Answer and explanation
Correct answer: ₹1,050
The relevant identity is Market Price = Factor Cost + Net Indirect Taxes. Therefore, ₹900 + ₹150 = ₹1,050. Option C is correct because market price includes the net tax adjustment over factor cost. Option A subtracts the tax, option B leaves the tax unaccounted for, and option D adds ₹250 instead of the stated ₹150. The calculation uses the same monetary unit throughout.
Frequently asked questions
What is the correct answer to this question?
₹1,050
Why is this the correct answer?
The relevant identity is Market Price = Factor Cost + Net Indirect Taxes. Therefore, ₹900 + ₹150 = ₹1,050. Option C is correct because market price includes the net tax adjustment over factor cost. Option A subtracts the tax, option B leaves the tax unaccounted for, and option D adds ₹250 instead of the stated ₹150. The calculation uses the same monetary unit throughout.
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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