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Suppose a jar of orange marmalade that is ultimately sold to a customer at The Corner Store is produced by the following production process: Name of Company Revenues Cost of Purchased inputs Citrus Growers Inc. $0.75 0 Florida Jam Company $2.00 $.75 The Corner Store $2.50 $2.00 What is the value added of The Corner Store? $0.50

Respuesta :

Answer:

$0.50

Explanation:

Note: The data are merged together and they are first separated before the question is answered as followed:

Name of Company             Revenues       Cost of Purchased inputs

Citrus Growers Inc.                $0.75                               0

Florida Jam Company           $2.00                             $0.75

The Corner Store                   $2.50                             $2.00

The explanation is now as follows:

Value addition is the difference between Revenues and Cost of Purchased inputs. Therefore,  the value added of The Corner Store can be calculated as follows:

Value added of The Corner Store = $2.50 - $2.00 = $0.50

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