If market price is ₹3,600 crore and net indirect taxes are minus ₹250 crore what will be factor cost?
Answer and explanation
Correct answer: ₹3,850 crore
The conversion formula is Factor Cost = Market Price − Net Indirect Taxes. Substituting the negative value gives ₹3,600 crore − (−₹250 crore) = ₹3,850 crore. Therefore, option C is correct. Subtracting a negative amount is equivalent to adding ₹250 crore. ₹3,350 crore would incorrectly treat the tax as positive, and the other options use unrelated calculations.
Frequently asked questions
What is the correct answer to this question?
₹3,850 crore
Why is this the correct answer?
The conversion formula is Factor Cost = Market Price − Net Indirect Taxes. Substituting the negative value gives ₹3,600 crore − (−₹250 crore) = ₹3,850 crore. Therefore, option C is correct. Subtracting a negative amount is equivalent to adding ₹250 crore. ₹3,350 crore would incorrectly treat the tax as positive, and the other options use unrelated calculations.
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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