Market price is ₹3,360 crore and it is 112 percent of factor cost. What is factor cost?
Answer and explanation
Correct answer: ₹3,000 crore
The governing concept is reverse percentage calculation. If market price is 112% of factor cost, then 3,360 = 1.12 × factor cost. Therefore, factor cost = 3,360 ÷ 1.12 = 3,360 × 100/112 = ₹3,000 crore. Option D incorrectly calculates 112% of ₹3,360 instead of recovering the original amount, while the other values do not satisfy the stated percentage relationship.
Frequently asked questions
What is the correct answer to this question?
₹3,000 crore
Why is this the correct answer?
The governing concept is reverse percentage calculation. If market price is 112% of factor cost, then 3,360 = 1.12 × factor cost. Therefore, factor cost = 3,360 ÷ 1.12 = 3,360 × 100/112 = ₹3,000 crore. Option D incorrectly calculates 112% of ₹3,360 instead of recovering the original amount, while the other values do not satisfy the stated percentage relationship.
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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