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Q: The value added of a firm is calculated as ________
  • A. Value of production of the firm – value of intermediate goods used by the firm
  • B. Value of production of the firm + value of capital goods used by the firm
  • C. Value of production of the firm/value of intermediate goods used by the firm
  • D. Value of production of the firm + value of intermediate goods used by the firm
Correct Answer: Option A - The value added of a firm is calculated as:- Value of production of the firm – value of intermediate goods used by the firm. Note:- Value- added describes the value that a company adds to a raw material or intermediate goods during the production process.
A. The value added of a firm is calculated as:- Value of production of the firm – value of intermediate goods used by the firm. Note:- Value- added describes the value that a company adds to a raw material or intermediate goods during the production process.

Explanations:

The value added of a firm is calculated as:- Value of production of the firm – value of intermediate goods used by the firm. Note:- Value- added describes the value that a company adds to a raw material or intermediate goods during the production process.