what is the effect of an indirect tax and a subsidy on the price of the commodity ? ( expert do not provide any link ) and asnwer the question in atleast 150 - 200 words . 

Dear Student

The concept of market price implies the price/money that a seller receives by selling his/her final commodity in the market. That is, it is the revenue for the seller. On the other hand, the concept of factor cost implies the money or the cost of production that a seller incurs to produce a commodity. After producing a commodity, when a producer sells his product in the market, then he need to pay indirect taxes (such as Sales Tax, VAT) and simultaneously also receives subsidies from the government. Thus, it can be said that the market price includes factor cost (cost of production) and Net Indirect Taxes (which implies Indirect Taxes - Subsidies). Therefore, we need to deduct Net Indirect Taxes from the Market Price to get Factor Cost. 

That is;

National Income at Market Prices (NNP_MP) – Indirect Taxes + Subsidies = National Income at Factor Costs (NNP_FC) 

or, National Income at Market Prices (NNP_MP) –  Net Indirect Taxes = National Income at Factor Prices (NNP_FC) 

Regards