Stage 1(sale of paddy by farmer to rice mill owner)Rs.2500Stage 2(sale

1.	Stage 1(sale of paddy by farmer to rice mill owner)Rs.2500Stage 2(sale of rice and husk by rice mill owner to hotelier)Rs.3600Stage 3(sale of idli ,dosaRs.5000Discuss : Why do both methods give the same result ?
Answer» Value added at all stages = Rs. 2500 + Rs. 1100 + Rs. 1400 = Rs. 5000. Stage 3 (sale of Idli and Dosa) = Rs. 5000 1. Whatever may be the method the value of final goods/services does not change. 2. In the first method, we do not add up the intermediate goods as the result in double counting. 3. But we calculated the value of the final goods (Idli, Dosa) that were produced. 4. In the second method, at every stage we counted the value added. 5. Finally we added up all the values added and got the final good value. 6. Thus both the methods give the same result.

Stage 1(sale of paddy by farmer to rice mill owner)Rs.2500Stage 2(sale of rice and husk by rice mill owner to hotelier)Rs.3600Stage 3(sale of idli ,dosaRs.5000Discuss : Why do both methods give the same result ?

Answer»

Value added at all stages = Rs. 2500 + Rs. 1100 + Rs. 1400 = Rs. 5000. Stage 3 (sale of Idli and Dosa) = Rs. 5000

1. Whatever may be the method the value of final goods/services does not change.

2. In the first method, we do not add up the intermediate goods as the result in double counting.

3. But we calculated the value of the final goods (Idli, Dosa) that were produced.

4. In the second method, at every stage we counted the value added.

5. Finally we added up all the values added and got the final good value.

6. Thus both the methods give the same result.