Question : Which of the following are true?
- Market price is always more than factor cost.
- A good can be an intermediate good in one case and a final good in another case.
Option 1: Both are true.
Option 2: Both are false.
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Answer (1)
15th Jan, 2024
Correct Answer: Statement 1 is false and statement 2 is true.
Solution :
Market price can be less than factor cost if net indirect taxes are negative. Market price can also be equal to factor cost if net indirect taxes zero.
A good can be an intermediate good as well as final good depending upon its nature of use.
Hence, Option D is correct.
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