A firm's value added equals
A)its revenue minus all of its costs.
B)its revenue minus its wages.
C)its revenue minus its wages and profit.
D)its revenue minus its cost of intermediate goods.
E) none of the above

Question

Quizplus · Accepted Answer

Value added is calculated by subtracting the cost of intermediate goods from a firm's revenue. This reflects the value that the firm adds to the original goods through production or other activities. Therefore, the correct choice is D.

A Firm's Value Added Equals