If market price is ₹6,400 crore and net indirect taxes are minus ₹200 crore, what will be the factor cost?
Answer and explanation
Correct answer: ₹6,600 crore
Use Factor Cost = Market Price − Net Indirect Taxes. Since NIT = −₹200 crore, FC = ₹6,400 − (−₹200) = ₹6,600 crore. Subtracting a negative amount is equivalent to adding ₹200 crore. Option B would be correct only for positive NIT, while A and D do not follow the stated formula.
Frequently asked questions
What is the correct answer to this question?
₹6,600 crore
Why is this the correct answer?
Use Factor Cost = Market Price − Net Indirect Taxes. Since NIT = −₹200 crore, FC = ₹6,400 − (−₹200) = ₹6,600 crore. Subtracting a negative amount is equivalent to adding ₹200 crore. Option B would be correct only for positive NIT, while A and D do not follow the stated formula.
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.
