If market price is ₹7,600 crore and net indirect taxes are ₹450 crore, what will be factor cost?
Answer and explanation
Correct answer: ₹7,150 crore
The conversion formula is Factor Cost = Market Price − Net Indirect Taxes. Substituting the given values gives ₹7,600 crore − ₹450 crore = ₹7,150 crore. Therefore, option B is correct. Option D would result from adding the net tax, which converts factor cost into market price rather than the reverse. Option C ignores the tax adjustment, and option A uses an incorrect subtraction.
Frequently asked questions
What is the correct answer to this question?
₹7,150 crore
Why is this the correct answer?
The conversion formula is Factor Cost = Market Price − Net Indirect Taxes. Substituting the given values gives ₹7,600 crore − ₹450 crore = ₹7,150 crore. Therefore, option B is correct. Option D would result from adding the net tax, which converts factor cost into market price rather than the reverse. Option C ignores the tax adjustment, and option A uses an incorrect subtraction.
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.
