A midwestern farmer grows wheat and sells it to a miller for $500.After processing,the miller sells the flour to a baker for $800,who then sells it to a grocery store for $1,000.The grocery store sells it to customers for $1,200.In these transactions,how much has been added to GDP?

Question

Quizplus · Accepted Answer

GDP only includes the final sale price of a good, so only the $1,200 price at which the grocery store sells the flour to customers is included in GDP. Therefore, $1,200 - $0 (since the flour was not produced by the grocery store) = $1,200 has been added to GDP.

A Midwestern Farmer Grows Wheat and Sells It to a Miller