How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?
What will be an ideal response?
A negative value added means that the cost of the intermediate goods exceeds the price of the final product produced using the intermediate goods. For value added to be negative, a firm would use its primary factors of production, such as labor and capital equipment, to produce a product from the intermediate goods that is less valuable than the intermediate goods themselves.
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Which of the following events will help to burst an asset price bubble?
A) Speculative demand for the asset quickly declines. B) Speculative demand for the asset quickly increases. C) New information leads buyers to doubt that prices will continue to increase in the future. D) A and C are correct
Of the following examples, which would most likely be performed by an economist working for the U.S. Federal Trade Commission?
A) forecasting employment trends in New England B) assessing whether Amazon should build its new headquarters in New York or Texas C) analyzing data related to a potential merger of two companies D) using economic models to forecast future inflation rates.