Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c }
{ \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$
What is the value added of Citrus Growers Inc.?

Question

Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: $$\begin{array} { l c c } 
 { \text { Name of Company } } & \text { Revenues } & \text { Cost of Purchased Inputs } \
\text { Citrus Growers Inc. } & \$ 0.75 & 0 \
\text { Florida Jam Company } & \$ 2.00 & \$ .75 \
\text { The Corner Store } & \$ 2.50 & \$ 2.00
\end{array}$$
What is the value added of Citrus Growers Inc.?

Quizplus · Accepted Answer

The value added of a company is its revenues minus the cost of purchased inputs. Citrus Growers Inc. only incurred costs of $0.00 (since they grew the citrus themselves), so their value added is equal to their revenues of $0.75.

Suppose a Jar of Orange Marmalade That Is Ultimately Sold