What determines the value of an item?

(a)the amount of goods that are produced
(b)the capital required to build the factory
(c)the unlimited wants of the consumers
(d)the resources consumed in production

The amount of goods that are produced determines the value of an item.

When an item is produced, it is the degree or amount of the items that actually determines its value. It therefore implies that the value of a commodity of item is directly proportional to quantity of the items. If the item is highly demanded, then the item is highly valued. If the item is less demanded, then the item is less or valued.

However, this is a function of the price movement. When commodities or items are in high demand and there is unavailability of resources for the company to produce the items or goods and services, then the price for the commodity will definitely be high.

Sometimes companies intentionally do it to maximize profit. It follows the general rule of supply which state when the market show a slower supply, the price must be high.

Again when the demand for a particular commodity or item has fallen, and there is availability of resources, the price for the commodity will also fall.

The purpose of this, is to enable the company have more customers. This also follows the general rule of demand which states that when the lower the price of item, the higher the item will be demanded.

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KEYWORDS:

The number of goods that are produced

Further Explanation:

The manufacturing company produces better than the value of the item is less and if the manufacturing company produces more good than the cost of the product will be high. In conclusion, the production determines the value of the item. So it all depends on the factors of production. In economics, there are many factors of production that leads to production of the outcome. The inputs, resources, and factors of production are used in the production procedures to form the output. The outputs are the finished goods, services. There are four factors of production: land, enterprise, labor,and capital. It is further classified as primary and secondary factors. The primary factors are three: labor, land, enterprise, and capital. The secondary factors are energy and materials because they help in achieving the primary factors. The role of primary factors is in facilitating the production but it does not take part in the production. Land is a natural resource used in the production process. The labor force is often called human capital. Technology and innovation also adds to the production system. The natural resource for the land includes water, soil, air. The payment to the landowners is either rent or in the form of loyalties. Labor includes the marketing and technical experts. The payment is done through wages. Labor contributes in the physical as well as mental way. Capital stock includes machinery and tools. There are other factors also like human capital that include skills and education. Intellectual capital and social capital adds towards service to the society while production in the goods, services. Some companies also do Social Services.

Learn more:

1.What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

2.Briefly explain the meaning of harmful substances in food production

Answer Details:

Grade: High School

Topic: Cost and Value

Subject: Social Science

Keywords:

Land, labour, enterprise, capital, human capital, technology, innovation, marketing, technical expertise, intellectual capital, social capital.

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