Two reasons why valuing goods at their market prices is different than valuing them at their factor costs include

Question

Quizplus · Accepted Answer

Valuing goods at their market prices includes indirect taxes (taxes on production) and subsidies (government payments to producers), which are not included in factor costs. Therefore, valuing goods at their market prices is different than valuing them at their factor costs due to the inclusion of indirect taxes and subsidies.

Two Reasons Why Valuing Goods at Their Market Prices Is