Practice question · True or false
A firm’s value added equals its total revenue.
Hints
- Ask what would be counted twice if this were true.
- The flour inside the bread was already counted by the mill.
Show the answer
False
Why
Value added is revenue minus the intermediate inputs bought from other firms. Counting full revenue would double-count the mill’s flour inside the bakery’s bread.
Practise Concept of the Firm
The app has 5 more questions on this lesson, and keeps your place in the course. Business I is free to start.
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