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GDP: Factor Cost & Market Cost (for UPSC CSE)
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This lesson outlines the concept of Gross Domestic Product at Factor Cost & Market Cost. Factor cost is the 'Price' of the commodity from the producer's side. Market cost is derived after adding the indirect taxes to the factor cost of the product. The formula to calculate is Market Cost= Factor Cost-Subsidies+Indirect Taxes.

Israel Jebasingh
Director of Officers IAS Academy. IAS Officer of 2004 Batch with AIR 59.

U
Unacademy user
thank you everyone, appreciate it.
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SF
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Thanks a lot Sir I don't have words to say in your praise
Respected israel sir your method of explaining is clear and one can be easily understand the topic, please give guidence on some more topics

  1. FACTORY RICE Rt in ACTORY kice=K. 4 LAKHS


  2. FACTORY PRice= FACTOR COST




  3. ACTOR COST +1nDRECT TAXES CExcise DUTY) (MARKET COST)


  4. SUBSIDY- R, 3 LA


  5. FACTDR COST DIRECT MARKET COST MINUS 3 LAKHs (SUBSIDIES 3 LAKHs (SUBSIDIES COST


  6. FACTOR INDIRELT SUBSIDIES COST COST TAReS MARKET- NDIRECT + SUBSIDIES = FACTOR C OST TAxES COST


  7. Factor Cost and Market Cost * Value of its total produced goods and services may be calculated at either the 'factor cost' or the market cost' .'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) also termed as 'factory price' or 'production price