Start learning 50% faster. Sign in now
Cost Income of an economy, i.e., value of its total produced goods and services may be calculated at either the ‘factor cost’ or the ‘market cost’. There is a difference between them. In general, they are also called ‘factor price’ and ‘market price’. India officially used to calculate its national income at factor cost. Since January 2015, the CSO has switched over to calculating it at market price ● Statement 1 incorrect: Factor cost is the ‘input cost’ the producer has to incur in the process of producing something (such as cost of capital, i.e., interest on loans, raw materials, labour, rent, power, etc.). This is also termed as ‘factory price’ or ‘production cost/price’. This is nothing but the ‘price’ of the commodity from the producer’s side. ● Statement 2 Incorrect: Market cost is derived after adding the indirect taxes to the factor cost of the product. It means the cost at which the goods reach the market, i.e., showrooms The formula to calculate is Market Cost= Factor Cost – Subsidies + Indirect Taxes
Which global bank recently partnered with India’s NPCI International to expand UPI services in the UAE?
What is the projected value of India’s bioeconomy by 2030?
Which city has hosted the Maha Kumbh 2025?
What is the age group targeted by the Khelo India Rising Talent Identification (KIRTI) programme?
Which Indian state will introduce basic military training from Class I in schools?
What is India's rank in the 2023 Asia Power Index by the Lowy Institute?
Which program won the Gulbenkian Prize for Humanity 2024?