Businesses Add Value to Raw Materials.
- Businesses - pay for raw materials > transform into finish products > sell them.
- Customers pay MORE for finished product than business originally paid.
- Difference between cost of raw materials bought and the price customer pays = VALUE ADDED.
- Value Added leaves a SURPLUS - used to pay other costs such as wages, rent, electricity. Left over money = PROFIT.
- The greater the value added, the higher the profits are.
Pay Transform Sell
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