Question

Briefly explain factor cost?
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Answer 1

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It can be defined as the actual cost incurred on goods and services produced by industries and firms is known as factor costs. Factor costs include all the costs of the factors of production to produce a given product in an economy. It includes the costs of land, labor, capital and raw material, transportation etc.

Answer 2

Answer:

The factor cost method takes into account the cost incurred to employ factors of production in the economy. The factors of production, namely, land is paid rent, labour is paid wages, capital is paid interest and entrepreneur is paid profits.