Economic Awareness - Sectors of Indian Economy
A company produces goods worth ₹50 lakh and uses intermediate goods worth ₹30 lakh. What is the value added by the company according to the Value Added Approach?
A company produces goods worth ₹50 lakh and uses intermediate goods worth ₹30 lakh. What is the value added by the company according to the Value Added Approach?
medium Q5 of 15
Step-by-Step Solution
Step 1: Recall the formula for value added
Value added = Value of output – Value of intermediate goods consumed.Step 2: Calculate value added
Value added = ₹50 lakh – ₹30 lakh = ₹20 lakh.Final Answer:
₹20 lakh → Option BQuick Check:
Value Added = Output minus Intermediate Consumption = ₹20 lakh ✅
Quick Trick: Subtract intermediate goods value from output to find value added.
Common Mistakes:
- Adding instead of subtracting intermediate goods value.
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