Business – 1.2 Business structure – Economic sectors | e-Consult
1.2 Business structure – Economic sectors (1 questions)
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Answer:
- Raw material extraction (Primary): Farmers grow and harvest cotton fibres.
- Processing (Secondary): The harvested cotton is transported to a ginning facility where the fibres are separated from seeds.
- Manufacturing: Ginned cotton is then sent to textile mills where it is spun into yarn, woven into fabric, and dyed.
- Value addition: The finished fabric is used by garment manufacturers to produce clothing, further increasing the product’s value.
The shift involves adding stages of production that transform the raw agricultural product into a manufactured good, creating new employment, capital investment in machinery, and higher profit margins compared with simple farming.