Market prices include indirect taxes (which increase the price) and exclude subsidies (which decrease the price), while factor costs reflect the cost of factors of production. The difference is the net effect of these two adjustments.
The difference between GDP at market prices and GDP at factor cost is
Asked in WBPSC CS Prelims 2020 · Topic: National Income & Gross Domestic Product (Gross Domestic Product (GDP): Concepts and Measures)
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