Business transform Raw Materials into finished products and sell them.
There are three steps: Input, Process, Output
Inputs mainly consist of Raw Materials
Processes consist of machinery/workload that transform the raw materials
Outputs are the finished product
Customers pay more for the goods than the business paid (raw materials and manufacture costs)
The difference between the selling price and the cost to produce the product is called Value Added
The value added leaves a Surplus which a business uses to pay for bills/overheads, the money left over is the Profit
The greater the value added, the higher the profit
Luxury items such as designer clothes have high added value
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