Firm A sells to firm B for ₹50 crores and for ₹70 crores to private consumption. Firm B sells for ₹80 crores to firm C. Firm C sells for ₹100 crores to private consumption.Calculate value added by firm A B and C .
Answers
Value added : Firm A= Rs. 120 crores, Firm B= Rs. 30 crores Firm C= Rs. 20 crores
Explanation:
Pls refer to the pic below
value added by firm A B and C .
Given
Sales, private consumption of firm A, B,C
To Find
Value added by firm A B C
Solution
Value of output of firm A = Sales to B + Sales to private consumption
Value of output of firm A = 50 + 70
Value of output of firm A = 120
Intermediate consumption of A = Value of output of A
There is no value of output of firm A
So, Intermediate consumption of firm A is 0
Value added by firm A = Value of output of firm A - Intermediate consumption of A
Value added by firm A = 120 - 0
Value added by firm A = 120
Value of output of firm B = Sales to C
Value of output of firm B = 80
Intermediate Consumption of B = Purchase from B
Intermediate consumption of B = 50
Value added by firm B= Value of output of firm B - Intermediate consumption of B
Value added by firm B = 80 - 50
Value added by firm B= 30
Value of output of C= Sales to private consumption
Value of output of C= 100
Intermediate consumption= Purchase from firm B
Intermediate consumption= 80
Value added by firm C = Value of output of C - Intermediate consumption
Value added by firm C = 100 - 80
Value added by firm C = 20