What determines the value of an item: a

Business Dec 10, 2020

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.

Expert Solution

The answer is d.

The value of an item is determined by (d) the production resources.

The value of an item is often depicted in the price of the commodity in the market. When determining the commodity price, producers often factor the production cost incurred in the production process and the profit margin that the producer wants to gain. Unlimited wants of customers do not affect the value of the product. Water has an unlimited want, yet its value in terms of price is low. The amount of goods used in productions also forms part of the production process but does not solely determine the value.

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