What is meant by added value in a business context?

Added value in a business context refers to the difference between the cost of producing a product and its selling price. This concept plays a crucial role in determining a business's profitability; when a product is sold for more than it costs to make, the difference represents the added value, which can cover operational costs and contribute to profits.

By creating added value, businesses enhance their products or services through various means, such as improving quality, branding, or customer experience, which helps justify a higher price point. This not only attracts customers but also helps businesses to differentiate themselves in a competitive market.

The other options discuss different aspects of business performance but do not encapsulate the concept of added value. Total revenue, for instance, tells us about income but not how much value is created over costs. Similarly, increases in quality or market share provide insights into other areas of business success but do not directly convey the financial concept of added value that relates specifically to the pricing strategy relative to production costs.