If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000,earns profits of $500,and sells its output for $14,000,the firm's value added is

Name: If a firm hires labor for $4,000,pays rent of $1,500,buys raw materials for $6,000,earns profits of $500,and sells its output for $14,000,the firm's value added is
Brand: Quizplus
Rating: 4.9 (55 reviews)

Question

Quizplus · Accepted Answer

Value added is calculated as the difference between the firm's sales revenue and the cost of raw materials. Here, it is $14,000 (sales) - $6,000 (raw materials) = $8,000.

If a Firm Hires Labor for $4,000,pays Rent of $1,500,buys