The value of a producer's output minus the value of all intermediate goods used in the production of that output is called the producer's
A)profit margin.
B)accounting profit.
C)costs of production.
D)value added.
E)net output.

Question

Quizplus · Accepted Answer

The correct term for the given situation is "value added". It represents the value that a producer adds to the inputs in the production process. Subtracting the cost of intermediate goods from the value of output gives the value added by the producer. This is an important concept in measuring a country's GDP as it avoids double-counting of intermediate inputs.

The Value of a Producer's Output Minus the Value of All