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Raj and Abdul want to increase the added value of their products - Edexcel - GCSE Business - Question 7 - 2017 - Paper 1
Question 7
Raj and Abdul want to increase the added value of their products. What is meant by added value? Select one answer. A) The difference between what a business pays ... show full transcript
Worked Solution & Example Answer:Raj and Abdul want to increase the added value of their products - Edexcel - GCSE Business - Question 7 - 2017 - Paper 1
Step 1
What is meant by added value?
Answer
The correct interpretation of added value in business refers to the additional value created by a company in the process of manufacturing or selling its products. This concept emphasizes the difference between the costs incurred in producing a product (such as payments to suppliers) and the revenue generated from selling that product.
Therefore, the answer is:
C) The difference between what a business pays its suppliers and what it receives from selling its products.
This option accurately describes added value as it highlights the relationship between costs (payments to suppliers) and revenue (sales income), illustrating how businesses can increase their profitability by maximizing this difference.