Correct option is D
The correct answer is: (D) Cost C
Explanation:
Cost C is considered the comprehensive cost of cultivation as it includes all actual paid-out costs and imputed values, such as Cost B2 plus imputed value of family labor.
Cost C is considered the comprehensive cost of cultivation as it includes all actual paid-out costs and imputed values, such as Cost B2 plus imputed value of family labor.
It reflects the true economic cost incurred by the farmer, including unpaid family labor, rent on owned land, and interest on owned capital, thus giving a holistic view of the total cost of cultivation.
Information Key Points:
Cost A1: Actual paid-out costs (e.g., seeds, fertilizers, wages).
Cost A2: Cost A1 + Value of family labor.
Cost B: Cost A2 + Rental value of owned land + Interest on fixed capital.
Cost C: Cost B + Imputed value of family labor.
It is the most inclusive cost concept, often used for fixing Minimum Support Price (MSP).
Reflects actual and opportunity costs borne by farmers.
Helps in estimating real profitability of farming activities.
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