For a hypothetical economy, assuming there are only two firms (X and Y) with equal values of Gross Value Added (GVA).
On the basis of the following data, estimate the values of Domestic Sales by firm X:
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Remember: Domestic sales exclude exports and only account for transactions within the country.
Step 1: Formula for Domestic Sales of Firm X.
The Domestic Sales of firm X can be calculated using the following formula:
\[
\text{Domestic Sales of Firm X} = \text{Value of Output of Firm X} - \text{Exports by Firm X}
\]
Step 2: Calculation of Value of Output of Firm X.
We know that the value of output of Firm X includes the value of its sales to other firms and households. To estimate it, we use the following:
\[
\text{Value of Output of Firm X} = \text{Purchases by Firm X from Firm Y} + \text{Purchases by Firm Y from Firm X} + \text{Additions to Stock of Firm X}
\]
Substituting the values from the table:
\[
\text{Value of Output of Firm X} = 400 + 300 + 100 = 800 \, \text{crore}
\]
Step 3: Substitution in the Domestic Sales Formula.
Now, we can calculate the Domestic Sales of Firm X:
\[
\text{Domestic Sales of Firm X} = 800 - 200 = 600 \, \text{crore}
\]
