**Disguised Unemployment**

Disguised unemployment refers to a situation where there are more workers employed in a particular sector than required for optimal production. In this scenario, if a factory owner retrenches 10 workers without any loss of production, it would be considered an example of disguised unemployment.

**Explanation:**

In a situation where a factory owner employs 400 workers, if retrenching 10 workers does not result in any loss of production, it indicates that these 10 workers were not contributing effectively to the overall output of the factory. This suggests that there is an excess labor force in the factory, and their removal does not affect the level of productivity.

To understand why this situation is considered disguised unemployment, let's explore the characteristics of disguised unemployment:

1. **Excess Labor Force:** Disguised unemployment occurs when there are more workers engaged in a particular sector or industry than necessary for optimal production. In this case, the factory owner employs 400 workers, but the retrenchment of 10 workers does not affect the production level, implying that there is an excess labor force.

2. **No Loss of Production:** A distinct feature of disguised unemployment is that the removal of workers does not result in any decline in output or productivity. In this case, even after retrenching 10 workers, the factory continues to produce at the same level, indicating that their contribution to production was minimal.

3. **Underutilization of Labor:** Disguised unemployment suggests that there is underutilization of labor, where workers are either idle or engaged in unproductive activities. The retrenchment of workers without any impact on production suggests that the factory was operating with excess labor, and the retrenched workers were not fully utilized.

Overall, the situation described in the question aligns with the concept of disguised unemployment. The factory owner's ability to retrench 10 workers without any loss of production indicates that there is an excess labor force in the factory, and these workers were not productively employed.