Final answer:
The increase in market value of a product at each stage of the production process is called value addition.
Step-by-step explanation:
The increase in the market value of a product that takes place at each stage of the production process is called value addition. Value addition refers to the creation of additional value to a product through various processes, such as manufacturing, branding, packaging, and distribution.
For example, let's consider a simple product like a t-shirt. When a raw material like cotton is transformed into fabric, value is added. Further, when that fabric is turned into a t-shirt through cutting, stitching, and printing, additional value is added. The final price of the t-shirt includes the cost of raw materials and the value added at each stage of production.
Value addition is an important concept in business as it allows companies to differentiate their products and command higher prices in the market.