An Indian farmer produces wheat without incurring cost of inputs all sells for Rs. 1,000 to a miller who grinds wheat into flour and sells for Rs 1,200 to baker. The baker sells bread to consumers for Rs. 1,600. Total added is Rs.

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The total value added is the sum of the value added at each stage of production. The farmer produces wheat valued at Rs. 1,000 (without any input costs), the miller adds value of Rs. 200 (selling flour for Rs. 1,200), and the baker adds value of Rs. 400 (selling bread for Rs. 1,600). The total value added is Rs. 1,000 (farmer) + Rs. 200 (miller) + Rs. 400 (baker) = Rs. 1,600.

An Indian Farmer Produces Wheat Without Incurring Cost of Inputs