On the basis of the given table, estimate the value added by the Baker.
(Amount in ₹ crore)
Farmer Baker Total Production 100 200 Intermediate Consumption 0 50 Value Added 100 ...(i)…
(Choose the correct option)
On the basis of the given table, estimate the value added by the Baker.
(Amount in ₹ crore)
| Farmer | Baker | |
|---|---|---|
| Total Production | 100 | 200 |
| Intermediate Consumption | 0 | 50 |
| Value Added | 100 | ...(i)… |
(Choose the correct option)
Show Hint
- 200
- 250
- 100
- 150
The Correct Option is D
Solution and Explanation
Value added is the extra value a producer creates. It is found by deducting the inputs bought from other firms from the value of output.
Step 2: Key Formula:
Value added = Total production - Intermediate consumption.
Step 3: Calculation:
For the baker, total production = Rs. 200 crore and intermediate consumption = Rs. 50 crore.
Value added = 200 - 50 = Rs. 150 crore.
Step 4: Check the other options:
(A) 200 is the total production. It forgets to subtract the inputs.
(B) 250 comes from adding the intermediate consumption instead of subtracting it.
(C) 100 is the value added by the farmer, shown in the table, not by the baker.
Final Answer:
Value added by the baker is Rs. 150 crore. This is option (D).
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