The Value Added of a Producer Is the

question 3

Multiple Choice

The value added of a producer is the

• A)total amount for which all its products sell minus its change in inventories.
• B)value of its total sales once externalities are accounted for.
• C)value of its output minus the value of the inputs it purchases from other producers.
• D)quality-adjusted amount of its total sales less any commissions paid.

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Definitions:

Organic

Pertaining to or derived from living organisms; in agriculture, involving food produced without the use of synthetic pesticides or fertilizers.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Profit-Maximizing

A strategy or approach aimed at achieving the highest possible profit from operations, often involving minimizing costs and maximizing revenues.

Negative Externality

A negative externality exists when a product or decision results in a negative effect on a third party not directly involved in the transaction.