Output at market price is ₹5,600 crore and factor cost is 6% higher than market price. What is factor cost?
Answer and explanation
Correct answer: ₹5,936 crore
The governing idea is a percentage increase from the stated base. Factor cost is 6% greater than the market-price output, so first calculate 6% of ₹5,600 crore: 0.06 × 5,600 = ₹336 crore. Add this increase to the original amount: ₹5,600 + ₹336 = ₹5,936 crore. Thus option C is correct. Option B ignores the increase, while A decreases the value and D applies an incorrect 10% increase.
Frequently asked questions
What is the correct answer to this question?
₹5,936 crore
Why is this the correct answer?
The governing idea is a percentage increase from the stated base. Factor cost is 6% greater than the market-price output, so first calculate 6% of ₹5,600 crore: 0.06 × 5,600 = ₹336 crore. Add this increase to the original amount: ₹5,600 + ₹336 = ₹5,936 crore. Thus option C is correct. Option B ignores the increase, while A decreases the value and D applies an incorrect 10% increase.
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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