An organization that combines inputs (factors of production) to create goods or services to meet the needs and wants of customers.

Value Added = Price of Product - Cost of Inputs

Example: Zenith Gadgets manufactures affordable smartwatches for local students.

Exam tip: Focus on the value-added process rather than just selling.

Sample question: Explain how Zenith Gadgets adds value to its raw materials.

Often confused with: Profit-seeking vs non-profit

Related terms: Inputs, Outputs, Factors of Production, Value Added