Question based on value added

Reference no: EM1370347

"What value added means is not a higher price for certain goods. Value added means adding value to a raw product at its present stage of production and possibly taking that product to the next stage of production. It is basically the difference between the income received from the sale of the various products or services of a business or company and the expenses incurred in buying materials from outside sources to produce those products and services.
Therefore, value added is not related to the fact the customer can or cannot afford to buy different good, there is no such thing as value added goods in the strict sense. "

1)I still dont understand however, why it is that as an economy grows it produces more value added goods . The explanation above implies that a higher value added product means that the spread between the cost of the inputs (required to produce) and the income received is larger - 2)again, does this not mean that people in that economy have to be richer to afford this new high value added good?

Reference no: EM1370347

Questions Cloud

Calculate the profit maximizing activity level : PL offers mail-order storage containers for china. The company is the low cost provider of these quilted boxes with fixed costs of $480000 a year, plus variable costs of $30 a box.

Explain what values or assumptions do the laws : Explain What values or assumptions do the laws of these countries make about the employment relationship?

Use algorithm np completeness of any of the problems : Use any algorithm we without writing out details of algorithm. In proving problem NP-complete, you may utilize NP completeness of any of the problems.

Explain what is the difference between a standard and budget : Explain What is the difference between a standard and a budget andf Manage by exception is a term often used by management

Question based on value added : What value added means is not a higher price for certain goods. Value added means adding value to a raw product at its present stage of production and possibly taking that product to the next stage of production.

Explain what economic concept is central to proving risk : Explain What economic concept is central to proving that risk neutral pricing functions in the establishing of option prices?

Multiple choice questions based on competitive market : A perfectly competitive market company realizes an average of $11 and an average total cost of $10.00. Marginal cost curve crosses marginal revenue curve at an output level of 100 units.

Explain what is the relevant cost of each recharger : Explain What is the relevant cost of each recharger if they make it themselves and What is the relevant cost of each recharger if they outsource?

Analyze use of databases in business environment : Create the 2-3 page memorandum analyzing use of databases in the business environment. Include what database applications must be used: Microsoft Access, IBM DB2, Oracle, etc.

User Account

All Pages