If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

A) $0
B) $15,000
C) $35,000
D) $38,000
E) $41,000

Question

Allie O'Loughlin · Accepted Answer

Final Answer : C, Explanation :  The value added by the firm is calculated as the difference between its sales and the cost of goods or services bought from other firms. Here, it's $41,000 (sales) - $6,000 (cost of raw materials from another firm) = $35,000. The costs of labor and rent are part of the firm's value-added, not deductions from it.

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

A) $0
B) $15,000
C) $35,000
D) $38,000
E) $41,000

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Learning Objectives

Related questions

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.A) $0B) $15,000C) $35,000D) $38,000E) $41,000

Definitions

Learning Objectives

Learning Objectives

Related questions

If a firm hires labor for $20,000,pays rent of $12,000,buys raw materials for $6,000 from another firm,earns profits of $3,000,and sells its output for $41,000,the value added by the firm is _____.

A) $0
B) $15,000
C) $35,000
D) $38,000
E) $41,000