Correct this misconception: Students often think 'added value' is the same as profit.
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Answer
Added value is the difference between the selling price of a product and the cost of the materials bought in. Profit is what remains after *all* other costs (including labour, rent, utilities, marketing, etc.) are also deducted from the added value. Added value is a step towards profit, but not profit itself.
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The concept of adding value
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