Market price will be equal to Factor Cost when:
Market price will be equal to Factor Cost when:
(a) Indirect Taxes are Zero
(b) Indirect Taxes are equal to subsidies
(c) No indirect tax and no subsidies
(d) Both (b) and (c)
Anurag Pathak Changed status to publish December 5, 2023
Ans – (d)
Market Price = Factor Cost + (indirect tax – subsidies)
When there is no indirect tax and no subsidies
Market Price = Factor Cost
When indirect tax is equal to subsidies
Lets indirect tax and subsidies are ₹ 20
Market Price = Factor Cost + (₹ 20 – ₹ 20)
Market Price = Factor Cost
Anurag Pathak Changed status to publish December 5, 2023
