The value added of a producer is the
A)total amount for which all its products sell minus its change in inventories.
B)value of its total sales once externalities are accounted for.
C)value of its output minus the value of the inputs it purchases from other producers.
D)quality-adjusted amount of its total sales less any commissions paid.

Question

Quizplus · Accepted Answer

The value added of a producer is calculated by subtracting the value of the inputs it purchases from other producers from the value of its output. This calculation provides a measure of the economic contribution made by the producer to the final product. Options A, B, and D do not accurately describe the concept of value added.

The Value Added of a Producer Is the