If (MP − FC) = −₹90 crore in an economy, which combination can be correct?
Answer and explanation
Correct answer: Indirect taxes ₹60 crore and subsidies ₹150 crore
The governing relation is MP − FC = net indirect taxes = indirect taxes − subsidies. The required difference is −₹90 crore. In option B, ₹60 crore − ₹150 crore = −₹90 crore, exactly matching the given value. Option A gives +₹90 crore, option C gives +₹90 crore, and option D gives +₹90 crore. A negative difference means subsidies exceed indirect taxes.
Frequently asked questions
What is the correct answer to this question?
Indirect taxes ₹60 crore and subsidies ₹150 crore
Why is this the correct answer?
The governing relation is MP − FC = net indirect taxes = indirect taxes − subsidies. The required difference is −₹90 crore. In option B, ₹60 crore − ₹150 crore = −₹90 crore, exactly matching the given value. Option A gives +₹90 crore, option C gives +₹90 crore, and option D gives +₹90 crore. A negative difference means subsidies exceed indirect taxes.
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.
