Suppose an apple pie sells at a grocery store is for $5. Suppose that the grocery store purchased it from a baking company for $4. Suppose the baking company paid $2 for ingredients, $1 for labor, and made $1 in profit. What is the GDP contribution of the pie?

Question

Quizplus · Accepted Answer

The GDP contribution of the pie is its final selling price, which is $5. GDP measures the market value of all final goods and services produced within a country in a given period, so only the final sale price to the consumer is counted to avoid double counting the intermediate costs.

Suppose an Apple Pie Sells at a Grocery Store Is