Question

You are given following information about four producers $A,B,C$ and $D$ in an economy:
$A$ sells $Rs.300$ worth of his output to $B$, $Rs.200$ worth of his output to $C$ and $Rs.500$ worth of output to households. The sales of $B$ to $A,C$ and $D$ are worth $Rs.400,Rs.200$ and $Rs.300$ respectively. $C$ sells to $A,B$ and $D$ output worth $Rs.100$ each. Sales by $C$ to households are worth $Rs.900$. $D$ sells to households output worth $Rs.700$. His exports are worth $Rs.300$ while stock worth $Rs.200$ remains unsold with $D$. Estimate the value added by.
(i) $A,B,C$ and $D$ separately.
(ii) All of them together.

Answer 1

Value Added by Firm $=$ Sales $+$ Closing Stock $-$ Purchase of intermediate goods

(i) Value added by:
Firm $A=Rs.(300+200+500)-Rs.(400+100)=Rs.500$;
Firm $B=Rs.(400+200+300)-Rs.(300+100)=Rs.500$;
Firm $C=Rs.(100+100+100+900)-Rs.(200+200)=Rs.800$;
Firm $D=Rs.(700+300)-Rs.(300+100)=Rs.800$
(ii)Total value added by Firm $A,B,C$ & $D=Rs.(500+500+800+800)=Rs.2,600$