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
Economics
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