Gerry grows marijuana plants from his own seeds in the forest behind his house. He sells 20 kilograms of plants to Smokey Joe for $4,000. Joe spends $200 on baggies for packaging, and resells the marijuana on the street for $6,000. Gerry's value added is

Question

Quizplus · Accepted Answer

Gerry's value added is the price he sells the marijuana for minus the cost of inputs. Since he grows the plants from his own seeds, his only input cost is essentially zero, making his value added the full $4,000 he sells the marijuana for.

Gerry Grows Marijuana Plants from His Own Seeds in the Forest