Case study: An economy has only two firms A and B.
Items (in lacs)
1. Exports by firm A 20
2. Imports by firm A 50
3. Sales to households by firm A 90
4. Sales to firm B by firm A 40
5. Sales to firm A by firm B 30
6. Sales to households by firm B 60
Answer the question on basis of above information.

Gross Domestic Product at market price will be:

120 lac

The correct answer is option 3: 120 lac

GDP at market Price    = Value added by firm A + value added by firm B
Value added by Firm A = Total Sales - total Purchases

                                =(Exports+ sales to Households +sales to firm B-Imports-Purchase from Firm B)                

                                =(20 + 90 + 40 - 50 - 30)

                                =70 Lakhs

Value Added by Firm B= (sale to households+ sale to A-Purchase from A)

                                  = (30 + 60 - 40)

                                  =50 Lakhs

GDP at market Price = 70+50=120 Lakhs