A farmer grows wheat and sells it to a bakery for $5.The bakery uses the wheat to bake bread and sells it to a distributor for $20.The distributor sells the bread to a supermarket for $30,which then sells the bread to customers for $50.Which of the following is true?
A)The value added by the distributor is $30.
B)The value added by the supermarket is more than that added by the bakery.
C)GDP rises by $50 plus the value added at each stage of production.
D)Counting the value added at each stage instead of counting the final selling price creates a problem of double counting.
E)The value added by the farmer is $20 because the wheat,which is worth $5,is necessary for each of the three remaining stages of production.

Question

Quizplus · Accepted Answer

The Answer of A farmer grows wheat and sells it to a bakery for $5.The bakery uses the wheat to bake bread and sells it to a distributor for $20.The distributor sells the bread to a supermarket for $30,which then sells the bread to customers for $50.Which of the following is true?
A)The value added by the distributor is $30.
B)The value added by the supermarket is more than that added by the bakery.
C)GDP rises by $50 plus the value added at each stage of production.
D)Counting the value added at each stage instead of counting the final selling price creates a problem of double counting.
E)The value added by the farmer is $20 because the wheat,which is worth $5,is necessary for each of the three remaining stages of production.

A Farmer Grows Wheat and Sells It to a Bakery