Question

What is the formula for Nva at factor cost and at market price?

Answer 1

Dear Student,
Net Value added at factor cost= Sales +Change in stock-Purchase of intermediate goods-Depreciation-Net indirect tax.
NVA at MP = (Output sold x Price Per Unit) + (Change in Stock) – (Intermediate Cost) - (Depreciation)

Market price and Factor cost will be equal when there is no indirect tax and no subsidy.
Market price - indirect tax + subsidies = Factor cost
Hence, if there is no indirect tax or subsidies, market price= factor cost.

Regards