Added Value

What is added value?

• The cost of production

• The difference between selling price and production cost
  
  

• The total revenue generated

• The profit margin

In the restaurant example, what was the cost of the ingredients?

• $50

• $10

• $30

• $40

How much did the customer pay for the meal?

• $10
  
  

• $40

• $50

• $30

What is one way a business can increase added value?

• Reduce the selling price

• Lower production quality

• Increase the selling price

• Decrease customer satisfaction

5. Why might customers stop buying a product after a price increase?

• They value the quality more

• They think the new prices are not worth it

• They enjoy competition

• They want to buy more

6. What can businesses do to reduce production costs?

 

• Hire more staff

• Use cheaper materials

• Increase the selling price

• Enhance product packaging

7. What is a potential downside of using cheaper materials?

• Higher production costs

• Improved customer satisfaction

• Lower quality of the product

• Increased added value

8. How can suppliers help businesses reduce costs without lowering quality?

• By increasing prices

• By offering price reductions

• By providing cheaper alternatives

• By reducing their service

9. Why is it difficult for every business to be successful?

 

• There are no competitors

• Every business has the same strategy

• Increasing value is not always easy

• Customers always prefer higher prices

10. What factors should businesses consider when trying to add value?

• Production costs only

• Customer preferences and production costs

• Marketing strategies only

• Competitor prices only