If market price is ₹3,900 crore and factor cost is ₹3,500 crore, what will be net indirect taxes?
Answer and explanation
Correct answer: ₹400 crore
The relationship is Market Price = Factor Cost + Net Indirect Taxes. Hence, Net Indirect Taxes = Market Price − Factor Cost = ₹3,900 crore − ₹3,500 crore = ₹400 crore. Option B is correct. ₹300 crore and ₹500 crore do not follow from the stated subtraction, while ₹7,400 crore results from adding the two values rather than finding their difference.
Frequently asked questions
What is the correct answer to this question?
₹400 crore
Why is this the correct answer?
The relationship is Market Price = Factor Cost + Net Indirect Taxes. Hence, Net Indirect Taxes = Market Price − Factor Cost = ₹3,900 crore − ₹3,500 crore = ₹400 crore. Option B is correct. ₹300 crore and ₹500 crore do not follow from the stated subtraction, while ₹7,400 crore results from adding the two values rather than finding their difference.
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.
