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Factor cost

The value of a good or service at the price received by the seller. This is the market price paid by the purchaser, minus any indirect taxes, plus any subsidies provided by the government. Factor cost is so called because the value of output at factor cost is the amount available to pay for bought-in inputs and for the services of the factors of production used. Factor cost thus involves treating any profits of the firms concerned as a payment for factor inputs.

Reference: Oxford Press Dictonary of Economics, 5th edt.