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Question
Suppose in a hypothetical economy there are only two Firms A and B, Firm A sold goods for ₹ 2,000 to Firm B and purchased goods for ₹ 1,000. Firm B exported goods for ₹ 2,500 and had domestic sales of ₹ 1,500. Calculate Net Domestic Product at market price, if consumption of fixed capital is ₹ 200.
Solution
| Value of Output (in ₹) |
Intermediate Consumption (in ₹) |
Value Addition (in ₹) |
|
| A | 2,000 (to B) | 1,000 (Purchases) | 1,000 |
| B | 2,500 (exports) 1,500 (domestic sales) |
2,000 | 2,000 |
| Total | 6,000 | 3,000 | 3,000 |
Net Domestic Product at MP = Gross Domestic Product at Market price – Consumption of Fixed Capital
= 3,000 – 200
= ₹ 2,800
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