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Question
Distinguish between Factor Cost and Market Price.
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Solution
| Factor Cost | Market Price | |
| 1. | The term factor cost refers to the prices of products as received by the producers. | MP is the market price paid by a buyer of a commodity. |
| 2. | FC = MP - NIT (NIT `->` Net indirect taxes) |
MP = FC + NIT (IT - Subsidies) |
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